By: Khushnood Ali Shaikh
KARACHI, Dec 23 (APP): Pakistan’s energy requirements over the next 15 years are expected to grow at a rate of between 4.4 to 6.1 % per annum based on the projected economic growth.Pakistan Institute of Petroleum (PIP), a credible energy advisory body of professionals in the petroleum sector, feels that this need is likely to be in the range of 115 to 148 million tonne equivalent to oil (TEO’s) by 2021-22. One can imagine, how difficult it is - in the present scenario of power shortage, depleting gas reserves and rising circular debt, to secure a much needed energy in the country in times ahead at affordable rates.However, experts in energy are still convinced that this dream can be materialized by taking advantage of the vision of Shaheed Mohtarma Benazir Bhutto on energy.
Benazir’s 1994 energy policy was a comprehensive, coherent and
futuristic vision of energy needs of the country and its action plan was
devised after extensive consultations with all relevant stakeholders to
implement this policy.
This policy met with phenomenal success. About 6,500 megawatts (MW),
with an investment of around $ 6.5 billion, largely by foreign private
investors, were added to the national grid. At that time, the scale for
calculating the cost of thermal power plant was “one million dollars for
Hub Power Company (HUBCO) with about 1,200 MW was the largest private
sector power plant that came with big investment along with over a dozen
independent power producers (IPPs) under 1994 power policy.
Once again, her vision about energy was truly translated in PPP’s
manifesto of 2008 which called for utilizing coal, solar, hydro and wind
power to get the required energy for moving the wheels of the economy.
It anticipated that Pakistan would need another 8,000 MW by 2010 to meet
the energy requirements of the people.
The manifesto is committed to establishing a comprehensive and credible
program that ensures energy security and adequacy of supply. Key
elements would include maximum use of indigenous water and hydrocarbon
resources, energy conservation, proper pricing to ensure proper use
while protecting the life line consumers.
The last power station established in the public sector was the PPP’s
Ghazi Barotha 1,450 MW hydro electric power project which went online in
2004. The PPP also obtained a 500 MW nuclear power station at Chashma.
Her government had also attracted Hong Kong based investment magnet
Gordon Wu who signed memorandum of understanding (MoU) in October 1994,
for setting up large coal-fired power generating plants to generate
5,280 MW at a cost of $ 5.5 billion near Karachi.
Unfortunately, the slain leader never got the credit for the
transformation of the country’s beleaguered energy sector and instead
her policy was heavily criticized at that time by the non-visionary
people. It is only now that people are realizing the loss due to IPP
policy’s abrupt reversal has caused to the nation.
In fact, all those projects were awarded through a transparent and
competitive process on first-come-first-serve basis. Each project had
the same tariff, power purchase agreement, and fuel supply agreement.
Much debated tariff was as low as 4 cents per kilowatt hour.
In 1998 the Nawaz Sharif government accused the IPPs - particularly
HUBCO - of hoodwinking the former government of Benazir Bhutto into
signing fraudulent and unaffordable agreements with WAPDA. Despite
intensive investigations, no charges of corruption were proven.
Foreign investors were subjected to such humiliating treatment that many
sold out and left while others had to seek protection from their
governments, thus, investor confidence suffered an irreparable loss.
There is no investment in Pakistan from international banks in
infrastructure projects since 1996. As a result, the national grid’s
capacity remains unchanged despite several polices post-1994, since
Benazir Bhutto left office.
It would be no exaggeration to state that during the last ten years, not
a single mega watt of power was added at the behest of the post-Bhutto
The single most significant addition of power through the 1200 MW Ghazi
Barotha power project was also due to Mohtarma Bhutto who lifted this
project from the cold storage of the Planning Commission and put it on
the fast track for implementation.
It was in September 1995 that the financial arrangements for Ghazi Barotha project were firmed up with the World Bank.
The manifesto of 2008 had called for specific actions and interventions
will include encouraging and attracting private sector energy projects,
fast tracking of exploration and development of indigenous hydro carbon
resources, including the Thar coal project, accelerating development of
alternative energy, including wind and solar energy, reviving the Keti
Bunder project, establishing an energy corridor from Central Asia to
Balochistan, and a sustainable program to bring energy to the doorstep
of the poor.
She called coal as black gold, that could change the destiny of the province as well as the country.
Today, the economy is loosing billions of rupees due to loadshedding.
Could anybody explain why after ten years, the country is facing a much
worse peak-time shortage of power of over 5,000 MW when at the time of
the 1994 policy the shortage was merely 2500 MW?
What would have been Pakistan’s fate had the IPPs set up under Benazir’s government not contributed 6,500 MW to its supplies?
Benazir stood as a beacon of light for all those who would like to see
Pakistan emerge as an economic power house. From tax reforms to
disciplined spending, from tariff rationalization to introduction of
privatization through broad based selling of small shares, from social
sectors to community development, from infrastructure development to
creating a name for Pakistan in the international market, Ms Bhutto has
shown what it takes to move on a determined path dictated by the
imperatives of objectives.
Pakistan’s history would have been different, if she was allowed to
complete her terms in office. Truly, we have lost perhaps the most
renowned, towering and internationally respected leader.