'Light' at the end of the term

While the government has been promising light at the end of the term, the consumers are not seeing light at the end of the tunnel. Loadshedding has started with its usual relentless schedule and regularity. This is such a predictable pattern that no amount of press conferences and statements by politicians and bureaucrats can change the paradigm that this issue has no solution. The dark alley of power breakdowns, feeder tripping, oil shortages, distribution losses continues to make this basic facility a luxury only available to those who can either afford their own generation or influence the high-ups to bestow favours on them. The new generation cannot imagine a time when electricity was a norm instead of loadshedding. However, that was not the case a decade ago.
Pakistan was much better than India and many neighbouring countries with a surplus of energy in 2001. It was post 2006 that this problem started assuming alarming proportions and has now become a monster uncontrollable. The fact of the matter is that despite it being a top priority on all government manifestos it has failed to be a top priority in terms of an overhaul of the system and genuine reforms. The race to increase capacity by making more and more plants has created a capacity nightmare of an unprecedented scale.
The principle is that you are as strong as the weakest link on the chain. The concept of supply chain management of producing energy is a basic of any project or plant management. Supply chain means logistics management of all the required inputs and materials that are required like oil, gas, finances, and then most importantly the distribution network that can undertake the pressure of additional capacity. The focus on building plants with oil, coal, solar and inaugurations of each plant with the addition of how many MWs have been added is where the flaws lie. Just think about a machine ready to be operated to produce and there being no fuel to operate the machinery. Or imagine having a factory where you have produced the goods but not having the trucks to deliver it to the customer.
The energy crisis is not just a crisis of bearing heatwave for people it is a question of bearing economic downturns for industry, jobs and sustainability. The industrial growth has slowed down and exports have nose-dived as exporters struggle to bear the huge cost of self-generated energy and consequently late deliveries due to frequent breakdowns. Faisalabad alone has reported 50% reduction in factory capacities due to inability to compete internationally. This has resulted in massive unemployment especially in the low skill labour category. This unemployment has stressed and further marginalized the poor of the country with disastrous social consequences. Crimes have gone up and rapes, murders, shootings, suicides and conflicts have multiplied.
The problem with increasing the production capacity is two-fold. Firstly, according to the 2013 figures the country already had a generation capacity of 22000 MWs while demand at that time was 16,000MW. Most of the plants were suffering from incompetent management, outdated technology and embedded corruption, financial and institutional. Every loan taken from the IMF and the World Bank made energy reforms part of their structural adjustment programs. Every report given by these institutions rued the fact that the government had failed to make these reforms. Thus without addressing the fundamental issue of dealing with incompetence and unmerited appointments in a highly technical field, the stopgap strategy of building more projects is just adding to the ballooning debt of the industry.
While the government keeps on claiming adding 10,000MW to the national grid in five years and thus trying to justify their claims that loadshedding has been controlled, the real issue is much bigger. The problem is that most of these plants either get delayed as was the case of Nandipur which despite a cost escalation of nearly 500% is still only producing 25% of its capacity, or, they are still in the testing stage and not fully functional. For example, the RLNG-based power plants - Havelli Bahadar Shah, Bhikki and Balloki (with a total generation capacity of 3,600MW) - are still in a testing phase with no power generation from these plants currently available. The hydropower generation is also less due to the low water release from reservoirs. The new Neelum-Jehlum power plant, too, after years is still in testing phase.
Even if they all start generating electricity, without overhauling the crumbling transmission and distribution infrastructure the added capacity will be wasted yet- little effort is made to improve it. The reason being, that for politicians investing in transmission infrastructure is a long and non-visible voting investments. Plants and projects are tangible and concrete. They are launched and are built in shorter periods. They are inaugurated and named after politicians. They contain many saleable points. Distribution is messy, long and non-attributable to specific people and parties and thus gets brushed aside in allocations of budget resulting in a nightmare of electricity shortages. Another non-visible but monstrous guzzler is the circular debt issue.
The mystery of the circular debt clearance of Rs 420 billion by the present government in 2013-14 has still not been solved. All audits provide evidence of some hefty payments made non-transparently. Despite Standing Committee challenging it no decision has been taken on it. That is why the fact that the cumulative circular debt has more than doubled to almost Rs 1 trillion is going to stress the sector to a level where breakdowns in the supply chain are going to be a norm. Payment to PSO, gas suppliers and IPPs etc is going to stall the process.
The main problem is the lack of transparency in the sector. An energy policy that defines the focus on cheaper and cleaner sources of fuel, the strategy to retire debt, the measures to control theft and corruption needs to be designed with all stakeholders on board. Nepra has been constantly saying that loadshedding cannot be finished before 2020. The government has been denying it and giving dates that have every time proven false. The inability of the successive governments to be open and transparent about the reform process and where the money is being spent has created this vicious circle of repeated failures. Without the end of mental loadshedding of policy makers, light at the end of the tunnel vision may remain short circuited.
(The writer can be reached at [email protected].)