Right focus on energy sector

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AS the electricity load-shedding has assumed menacing dimensions with serious consequences for the national economy and individual citizens, Prime Minister Shehbaz Sharif, on Sunday, directed the authorities concerned to take immediate steps for making functional the closed power plants and sought a report entailing clear reasons for the current load-shedding.

The PM promised that the PMLN-led national government would overcome the issue like in the past, as he himself was monitoring the load-shedding across the country.

There is no reason to doubt the commitment made by the Prime Minister about satisfactory resolution of the issue as it was the PML(N) Government that got rid of the load-shedding by initiating dozens of projects to increase the generation capacity, ultimately making the country surplus in power generation.

The way the Prime Minister is taking personal interest in the matter, it is hoped that problems of the energy sector would be resolved on a priority basis, paving the way for uninterrupted supply of power to all segments of the society.

However, official sources maintain that it is an uphill task and the efforts of the Government to streamline working of the power sector would take some time because of unprecedented bad management during the period of the previous Government.

They maintain that coupled with rising and high energy prices in the international market, Pakistan’s power sector is almost in the operation theatre and simply keeping it going is a miracle of a kind not known in this sector before.

It was a sort of criminal negligence on the part of the PTI Government that it made no long-term planning for procurement of LNG when its prices in the international market were lowest.

During Covid-19 or mid-2020, prices of RLNG fell to a record low of $ 3 to 5 per MMBTU but the then Government failed to enter into any contract for supply of the commodity on cheaper rates and now its spot price has gone up to $38 per MMBTU.

The PTI Government also failed to open a Revolving Account for completed projects like Sahiwal Coal and Hub Power, which meant no further financing for the energy sector under the CPEC umbrella.

Experts say either the previous Government did not understand the CPEC’s energy framework or was simply out there to strangle it to slow but sure death.

The then Government also ignored implementation of three most viable and high efficiency power projects – Karot (720 MW), Shanghai (1214 MW) and Punjab Thermal RLNG power plant at Trimmu, Jhang (1263 MW).

These were delayed first due to ill-placed enthusiasm of the PTI Government for witch hunt through NAB and then by its deliberate delay in achieving the financial close.

Had these three projects of 3200 MW been completed in time, load-shedding in urban Pakistan would not have been witnessed despite high energy prices in the international market.

The mounting circular debt and massive devaluation of rupee during PTI’s tenure are two other reasons behind the prevailing pathetic state of affairs in the energy sector.

The circular debt stood at Rs 1,151 billion in June 2018 but jumped to Rs.2,467 in March 2022, an increase of 114% despite major injections out of tax-payers money.

And one of the major causes of this rapid rise in circular debt was the depreciation of the rupee from 115 per dollar to 191 per dollar during the tenure of the previous Government.

The rise in circular debt has affected the Government’s ability to pay privately owned power plants in a timely manner and, in turn, has piled up liabilities of coal power plants as three of them, with a combined capacity of 3,900 MW, are running on part load.

The situation is, therefore, grim but it is encouraging that the Government was fully alive to it and steps are being taken to address the challenge comprehensively.

Apart from arrangements for import of coal from Afghanistan and provision of incentives to promote solar energy for homes and industry, tenders for procurement of 10 LNG cargoes for delivery in July to September 2022 have been issued.

The possibility of import of gas from Qatar on deferred payment is also being explored.

Hopefully, the focussed attention of the PM and the Power Division would lead to improvement in the overall situation, which is pathetic at the moment as rural areas are facing power outages up to 16 hours daily, making life of the people miserable.

 

 

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