Fourteen months after the PML-N government came to power, promising to ease power shortages, has actually increased loadshedding hours. Grumblings not only in opposition camps but also within the PML-N constituents about the failure to reduce loadshedding hours have escalated to violent street protests. Lahore and Multan, considered PML-N's strongholds, recently witnessed much public anger against what is being widely perceived as the party's inability to deliver on pre-election promises - promises that varied from one PML-N leader to another with Chief Minister Punjab Shahbaz Sharif even committing to resolving the crisis within six months and his party leader Nawaz Sharif claiming that power projects take time to be constructed but nonetheless promised an easing of the power outages in the short run if elected to power through improved governance.
Circular debt has once again reached alarming proportion with Water and Power Ministry continuing to rely on periodic handouts from the Ministry of Finance to enable Pakistan State Oil (PSO) to import fuel. While Finance Minister Ishaq Dar recently warned the Water and Power Ministry not to expect any more handouts yet it is unlikely that Dar would be able to resist a directive from the Prime Minister to release the amount required if street protests gather further momentum - protests that may be effectively harnessed to challenge the government's governance capacity by rival political parties particularly the Pakistan Tehreek-e-Insaf that has already announced its million march on 14th August. In this milieu the Pakistan People's Party, so far the most supportive party for the PML-N, launched a protest campaign in various parts of Sindh calling for ending unannounced loadshedding and water shortages and warned of countrywide protests until the situation improves within a fortnight - a strategy reminiscent of Shahbaz Sharif's constant harangues during the PPP-led coalition government for failing to provide Punjab with electricity. The proverbial foot, as the axiom rightly maintains, is on the other foot.
The PML-N maintains that it has begun investing in power projects that would be completed within four to five years and hence the public must be patient. What has irked power sector experts is that the claims made by the government are simply inaccurate on three major counts. First and foremost, the newly-elected PML-N government decided to eliminate the bulk of the circular debt on 29th June, 2013 arguing that this would release 1700MW into the system. Independent research shows that the actual increase was 700 to 800 MW and that the bulk of this was diverted to three Punjab cities namely Lahore, Faisalabad and Gujranwala. The rise in generation did not take account of the annual increase in demand, which is around 800 MW and that accounts for the rising number of hours of loadshedding. Additionally the government has not succeeded in reducing receivables, which has implied that the circular debt has simply resurfaced and today it is almost as high as it was on 29th June, 2013.
Second, the rise in generation from Nandipur and Guddu did not materialise in spite of much fanfare with the Prime Minister inaugurating these two power plants as the former continues to await the arrival of a furnace oil treatment plant, which would then be followed by extensive test runs and certification process by the manufacturers and regulators and only then can a commercial operational dispatch be issued, while Guddu power plant is also not operational as one of its turbines is non-functional. Third, the short-term measures that could have improved power supply related to power sector reforms focused on reducing transmission and distribution losses. While transmission and distribution losses have decreased marginally it may be recalled that recently Secretary of Water and Power revealed that the system could only withstand supply of 15000 MW - any more would simply lead to tripping leading many to question the advisability of focusing on enhancing generation without improving the network.
To maintain that the government is doing all it can is therefore challenged by power sector experts as the government, like its predecessor, is raising tariffs to cover its own failures to reduce transmission and distribution losses as well as manipulating demand (it is not able to manipulate supply) thereby showing a shrinking gap, which is simply not backed by reduced hours of actual (as opposed to scheduled) loadshedding.
Sunday, August 3, 2014
Pakistan: Sindh PPP's protest
Fourteen months after the PML-N government came to power, promising to ease power shortages, has actually increased loadshedding hours. Grumblings not only in opposition camps but also within the PML-N constituents about the failure to reduce loadshedding hours have escalated to violent street protests. Lahore and Multan, considered PML-N's strongholds, recently witnessed much public anger against what is being widely perceived as the party's inability to deliver on pre-election promises - promises that varied from one PML-N leader to another with Chief Minister Punjab Shahbaz Sharif even committing to resolving the crisis within six months and his party leader Nawaz Sharif claiming that power projects take time to be constructed but nonetheless promised an easing of the power outages in the short run if elected to power through improved governance.
Circular debt has once again reached alarming proportion with Water and Power Ministry continuing to rely on periodic handouts from the Ministry of Finance to enable Pakistan State Oil (PSO) to import fuel. While Finance Minister Ishaq Dar recently warned the Water and Power Ministry not to expect any more handouts yet it is unlikely that Dar would be able to resist a directive from the Prime Minister to release the amount required if street protests gather further momentum - protests that may be effectively harnessed to challenge the government's governance capacity by rival political parties particularly the Pakistan Tehreek-e-Insaf that has already announced its million march on 14th August. In this milieu the Pakistan People's Party, so far the most supportive party for the PML-N, launched a protest campaign in various parts of Sindh calling for ending unannounced loadshedding and water shortages and warned of countrywide protests until the situation improves within a fortnight - a strategy reminiscent of Shahbaz Sharif's constant harangues during the PPP-led coalition government for failing to provide Punjab with electricity. The proverbial foot, as the axiom rightly maintains, is on the other foot.
The PML-N maintains that it has begun investing in power projects that would be completed within four to five years and hence the public must be patient. What has irked power sector experts is that the claims made by the government are simply inaccurate on three major counts. First and foremost, the newly-elected PML-N government decided to eliminate the bulk of the circular debt on 29th June, 2013 arguing that this would release 1700MW into the system. Independent research shows that the actual increase was 700 to 800 MW and that the bulk of this was diverted to three Punjab cities namely Lahore, Faisalabad and Gujranwala. The rise in generation did not take account of the annual increase in demand, which is around 800 MW and that accounts for the rising number of hours of loadshedding. Additionally the government has not succeeded in reducing receivables, which has implied that the circular debt has simply resurfaced and today it is almost as high as it was on 29th June, 2013.
Second, the rise in generation from Nandipur and Guddu did not materialise in spite of much fanfare with the Prime Minister inaugurating these two power plants as the former continues to await the arrival of a furnace oil treatment plant, which would then be followed by extensive test runs and certification process by the manufacturers and regulators and only then can a commercial operational dispatch be issued, while Guddu power plant is also not operational as one of its turbines is non-functional. Third, the short-term measures that could have improved power supply related to power sector reforms focused on reducing transmission and distribution losses. While transmission and distribution losses have decreased marginally it may be recalled that recently Secretary of Water and Power revealed that the system could only withstand supply of 15000 MW - any more would simply lead to tripping leading many to question the advisability of focusing on enhancing generation without improving the network.
To maintain that the government is doing all it can is therefore challenged by power sector experts as the government, like its predecessor, is raising tariffs to cover its own failures to reduce transmission and distribution losses as well as manipulating demand (it is not able to manipulate supply) thereby showing a shrinking gap, which is simply not backed by reduced hours of actual (as opposed to scheduled) loadshedding.
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