Power Hikes Were Inevitable But Is There Any Hope ?

                                        Power Hikes Were Inevitable But Is There Any Hope?

Pakistan suffered unprecedented Power Shut Downs in last 6-7 years, ironically the shut downs worsened over the period, with each passing day brought more misery and distress. It did not happen over night neither it can be rectified over night, it needs a consistent and honest effort which unfortunately was missing in dictator Musharraf Era followed by more misery in democratic regime of PPP. Both made devastating decisions, both followed the same policy of 'Rental Power Plants', marred by corruption and nepotism, billions of dollars  were looted. Zardari regime came into Power with 6-8 hours of Power outages, which unfortunately worsened as days and years passed, peaked to 15-18 hours when Zardari Sahib left. Three biggest mistakes made by Zardari regime. 1) Blindly followed the Musharraf Policy of Rental Power Plants. 2) Not giving a comprehensive Power Policy. 3) Corruption was rampage and broke all records, nepotism and favouritism was promoted without realising the fall out on country's economy above all on people's life's.

Now came the PMLN with a promise of Roshan Pakistan, with a commitment to get rid of this darkness hampering growth, making life of a common citizen, a living hell, bringing the economy to a near stand still, in fact a net negative growth in last PPP tenure, almost zero job creation in five year rule, leaving a historic debt of 14.5 trillion rupees.

 

PMLN after assuming power, promised to get rid of this years long "circular debt" in 60 days, which they actually paid within promised period, a sum of 480 billion paid to Power companies. Secondly, they did give a "Power Policy" within months of assuming Power.  These two steps have done wonders, immediately reviving the image of the Pakistan among International Power Companies, opening up new horizons of Foreign Direct Investment plus bridging that trust deficit developed among these Power Producers, who threatened to invoke sovereign guarantees in fact took the Government Of Pakistan to court. International Organisations have agreed to pour in funds in different Hydro Projects, Independent Power Producers  have also agreed to shift their Thermal Power Plants to Coal Based Low Cost Plants, Coal Projects with the help of Multinational companies at Godani and Port Qasim are beginning to look like a reality, many other avenues have opened up like Solar Park in Behawalpur, Wind Projects in Sindh etc. Paying this circular debt has immediately subsided Power Crisis, Load Shedding has been brought down to 6-7 hours in fact on Eid Holidays there was almost no Load Shedding or Minimum in few areas. Experts believe that Power crisis has cost this country 1-1.5% of GDP growth yearly, that is equivalent to 1000 billion rupees annually, Now just imagine the impact of reduced power shortages. Adding to this tally, imagine the number of jobs that will be created once medium to small industry are switched on after years of shut down, just on this EID we witnessed a historic Economic activity, 228 billion worth Animals slaughtered across Pakistan, 31% increase from previous year, 10 billion rupees hides bought by leather industry alone.

Now there is a huge resentment, anger among different political parties and masses on recent Power Hikes by PMLN Government. Raising rates for different slabs, but not touching the 68% of population that is using below 200 units, raising minimum rates for next slabs using 20% of electricity that is 200-300 units, yes the most effected ones are the rest 12%. These power hikes increased strategically in winter to minimise the backlash of public, which seemingly working and people adjusting to new reality. Now Question arises, Is There Any Hope After Recent Power Hikes?

 1) PMLN paid the circular debt of 480 billion rupees, if you wouldn't hike the rate this will accumulate in a year and half, because in last decade or so we have made mess of our energy mix, from 70-30 mix in hydro favour we have reversed the trend in last decade, now average cost of a unit is 16-17 rupees. 12 rupee cost, 2 rupee administrative cost add 2-3 rupees line losses to it. PPP made a grave mistake by not rationalising the tariff, secondly not bringing down the line losses that led to their down fall. PMLN doing both the things, a country wide crack down on Power Thief's, putting pressure on respective Provincial Government's with highest line losses like Pesco, Hesco, Qesco, KESC etc. That doesn't mean there is no theft in Punjab, only difference, in Punjab consumer has to pay for the theft while in other Provinces the State bear the brunt. 2) PMLN making head ways in changing that energy mix initiating work on many low cost energy projects, focusing on alternate energy projects like Godani Power Corridor, Solar Parks, Basha and Dhaso Dams, Wind Energy, Terbela Extension, expediting work on Nelum Jehlam and Nandi Pur Power projects, Chasma 3 & 4,  2100 MW Nuclear Power Plants in Karachi, revamping Jamshoro Power Projects, Guddu Power plant 765 MW, Independent Power Producers converting 3000 MW Power houses to Coal etc. 3) PMLN paid this circular debt by printing new notes which already have crossed 550 billion rupees in PMLN 120 days in office bringing a tsunami of inflation,  it will be catastrophic to print such an amount in 1.5  year down the line. Just imagine PPP government giving staggering 1400 billion rupees in subsidy during their tenure without discriminating between elite, powerful, poor and crushed ones,  it's not a rocket science to assume who benefited the most. On top of that a 200 billion theft yearly, highest line losses in Pakistan's 65 year history, Grand total is 2400 billion rupees, imagine with this much money two large dams can be built, can make all our miseries go away in a blink of an eye if this money would have been utilised sensibly. 4) Nawaz Regime has formulated a comprehensive Power Policy to tackle this menace, may prove a game changer, this needs to be implemented in letter and spirit, Provincial Government's are to be held accountable as proposed in this Policy, stringent anti-theft laws, prioritising the Gas allocation to efficient plants, eliminating unjust subsidies given to different Industries while allocating gas quota's are the salient features of this power policy.

Next 2-3 years will define the path set by this Government, solving this puzzle of power crisis can actually lead to make or break of this Government, if Nawaz Regime is able to change the energy mix in next 36-48 months hence brings the tariff down, if Nawaz Regime is able to curtail the depressingly high Line Losses which ironically are highest in the region, if Nawaz Regime is able to revamp the ailing and decaying Power Infrastructure, placing honest and able Chief Executive assisted by truthful BOG, only then the people of Pakistan will be satisfied. I think next election will be fought on two points, "Energy and Terrorism", merciless and heartless accountability awaits this regime in 2018 so they better be ready for it.