Providing a platform for interaction among the various stake
holders to create a conducive environment
By SHABBIR H. KAZMI
Apr 17 - 23, 2000
The third Pakistan Energy Conference is being held on April 19, in
Karachi. This is an annual conference arranged by Millennium Media. This year the main
sponsors are Pakistan Kuwait Investment Company and Co-sponsors are: Pakistan & Gulf
Economist, The Hub Power Company, Karachi Sheraton Hotel, Allied Engineering &
Services and Mobil-Askari Lubricants. Lt. Gen. Zulfiqar Ali Khan, Chairman, WAPDA will be
the Chief Guest.
The first session will also be chaired by Lt. Gen. Zulfiqar Ali Khan.
The chairman for the second session will be Zafar Ali Khan, Secretary, Privatization
Commission and the last session will be chaired by Irfan Siddiqui, General Manager,
Pakistan Kuwait Investment Company. Other eminent speakers are: Zafarullah Khan,
Secretary, Ministry of Water and Power, N. A. Zubari, Director (Projects), Private Power
and Infrastructure Board, Khurshid Hussain, CEO, The Hub Power Company, Shaukat R, Mirza,
CEO, Pakistan State Oil, Zafar Usmani, CEO, Mobil Askari, Adbullah Yousuf, Secretary,
Ministry of Petroleum and Natural Resources and Peter Cuskernft of Premier-Shell Pakistan.
At this juncture, the need for a frank debate among the planners,
policy makers and all the stakeholders is very urgent as Pakistan needs mega investment in
the sector. The per capita consumption of energy in the country is very low. This is due
to inability of the state-owned entities to expand their capacity to meet the ever
increasing demand. The major hurdles in expansion have been the shift in funding policies
of lenders leading to acute shortage of capital and higher interest rates of borrowing at
Traditionally, at such a conference the discussion is regarding
investment opportunities, government policies and their impact on the performance of key
players, and the issues facing the sector. It will be interesting to watch the experts
present their point of view and participate in lively discussion to propose guidelines for
the forthcoming energy policy.
There are two important factors to be kept in mind availability
and affordability while making any diligence. The country is deficient in
indigenous energy supply as well as the consumers suffer due to irrational tariff
structure. While it is true that certain groups of consumers need supply of energy
products at discounted rate, but at the same time, others should not forced to subsidize
The energy sector in Pakistan is going through a transitory period. The
sector considered to be an exclusive domain of the government about a decade ago has now
significant investment by the private sector. The role of private sector will be even
bigger in the years to come as the government is committed to privatization of state-owned
The government has to come up with an attractive energy policy to
attract both local as well as foreign investment in the sector. One may say that at times
the GoP comes out with a pragmatic policy but its implementation remains a key issue
because the details are overlooked and the actual impact of the policy is not studied.
Therefore, the subsequent amendments often distort the whole policy.
As the GoP has expressed its full commitment to privatization of
state-owned entities, the first requirement is establishment of regulatory authorities in
the concerned sub-sectors. i.e. power and gas authorities. The creation of only symbolic
authorities is neither acceptable by the local nor the foreign strategic investors. Their
demand is real autonomous and strong authorities which can protect the interest of all the
The process of privatization in Pakistan was decelerated mainly due to
imposition of economic sanctions on the country in May 1998. With the gradual withdrawal
of these sanctions and resumption of talks with multilateral lenders, privatization
process is once again expected to get momentum because Pakistan offers enormous potential
for investment. The market size, gap in demand and supply and BMR needs are enough reasons
for making investment in the country.
Since all the emerging markets need foreign investment the GoP policies cannot remain
aloof. Pakistan has to match its offer, if not the better, with the incentives provided by
other countries in the region. The spirit should be following the market based policies
and not offering protection for inefficiency, mismanagement and malfunctioning.