Economic revolution under candle light!
By AMANULLAH BASHAR
Apr 30 - May 06, 2001
As usual, the economic managers of Pakistan are
displaying their wisdom and knowledge to bring prosperity to the
country through economic reforms and other structural changes, which
the people are hearing for over last 50 years. Since these rosy
slogans and the ground realities are contradictory in terms, these
policies do not generate any enthusiasm or spirit among them as they
are now used to listening of such claims for over the years.
Some times the economic champions duped them by
floating the idea of nationalization of large private sector entities
on the promise that the masses will be the shareholders of these
assets. They took over the entire efforts of the private sector into
their control on the pretext that the entire national wealth belonged
to people. The cronies were however the only beneficiaries of this
policy while the masses were again empty handed. Instead of producing
the good results, the national economy was converted into a stinking
mess. This situation forced the people at the helm of affairs to
reverse the policy of nationalization. To regain the confidence of the
private sector to play their due role in the restructuring of the
economy, the taken over assets were again put on sale through the
process of privatization. It was the time when another slogan was
raised that Pakistan is going to be the "Asian Tiger" soon.
Unfortunately, this promise of making Pakistan an Asian Tiger remains
as the promise.
According to an UNCTAD report, Pakistani growth
rate during 2000 accelerated in comparison to previous years but still
lags behind other countries in the region. The report says that the
external factors in Pakistan had remained fragile while the reserves
continued to decline from already low levels bringing the currency
under pressure. Report further comments that adverse movements in
prices of the primary commodities may require further structural
reforms in agriculture and industry to strengthen competitiveness. Low
investment rate that will continue to constrain the growth, the report
said. In the light of this report, the people responsible for economic
survival of this country are required to give serious thinking over
the elements impeding the national growth rate.
HOPE
The wind has started blowing in the different way
now. A new wave of hopes has overwhelmingly taken over the people to
make Pakistan an information technology (IT) power.
The present government has come out with policies
to exploit the opportunities available in the IT sector around the
world. Infinite number of IT schools, colleges and universities have
emerged on the ground and the majority of the young generation has
changed the direction of their future towards IT. The government has
also chalked out policies to attract international players in the IT
sector to bring foreign investment in this sector. No doubt that this
cutting edge technology promises a bright future for the talents and
the rich human resource this country possesses.
As a result of combined efforts of the government
and the private sector, all is set to bring an IT revolution in this
country. But can we bring an IT revolution under the candle-light.
Despite all the tall claims, power sector, which is
of course the engine for economic growth, has, miserably failed to
deliver the goods. Although a good number of private sector power
producing companies are providing support to the public sector power
utilities companies, the industrial, commercial and social sectors are
subjected to the rationing of the power. Is it an ideal condition to
attract the foreign investment, achieve economic and social targets?
We certainly can have a sumptuous candle-light dinner but not the
economic revolution or industrial revolution.
Although the management of WAPDA and KESC, the two
public sector entities, is currently being manned by the strong hands
of senior army officers, yet the strong Mafia of the corrupt elements
is so deeply rooted in these two organizations that the best decisions
to streamline the systems have not produced the desired results so
far. The transmission and distribution losses are constantly
oscillating between 37-40 per cent mostly on account of power theft
strongly indicates the existence of corrupt who are involved in this
multi-million racket. Without connivance of the staff of the utility
organization power theft cannot take place. The KESC chief was however
critical about the people who have not the moral courage to point out
the officials involved in power theft of corruption. He said that
people avoid to complaint in writing against the corrupt on the
reasons that army is here for the temporary period while the consumers
have to deal with these corrupts after the army management leaves the
organization. If every body sticks to such types of arguments than
they should also be prepared to face the music. People would have to
muster courage to complaint or witness against such corrupt people to
weed them out of their place, he urged.
He recalled that the past management used to send
inflated or fictitious bills through average billing to hide the
losses on account of power thefts or line losses. The present
management has reduced the average billing system to the minimum and
whatever the losses are being shown are the genuine ones. As a result
of these efforts, we have improved our recoveries. The revenue target
for the current year is fixed at Rs32 billion and we have already
achieved Rs 22 billion of that target in March last. The revenue
collection during past three years was Rs29 billion during 1997-98,
Rs27 billion in 1998-99 and Rs26 billion in 1999-2000, the target for
the current fiscal is Rs32 billion which is well within reach. When
asked how the KESC managed to reach this level of recovery, he said
that besides improving billing system, thousands of Kundas were
removed with the support of local population. Citing the example of
Orangi township scheme, he said that when the KESC team took them into
confidence and assured them that Kunda system is not in their own
interest, they were convinced and helped KESC teams to remove Kundas.
He said that such teams have also been planned to visit in other
targeted areas to remove illegal connections.
Situation demands for drastic steps to weed out the
corrupt still busy in eroding the foundations of the national
organizations. The private sector again needs a greater role to
streamline the power sector to the level of satisfaction of the
consumers of all segments.
More IPPs
Brig. Syed Shahid Mukhtar, Managing Director of
Karachi Electric Supply Corporation (KESC) has recommended to the
Ministry of Water and Power for establishment of two more Independent
Power Producing (IPP) units to meet the future demand of in Karachi.
This recommendation of the KESC for setting up of
two more IPP units, in a way, is a compliment to the significant role
being played by the private sector for power generation in Pakistan.
Currently, two IPPs i.e. Gul Ahmed and Tapal are
reinforcing the KESC's power generating system with an installed
capacity of about 125 and 135mw respectively.
As far as the thermal power generation is
concerned, the private sector is providing a great support to the
public sector power utilities by generating more than WAPDA's current
thermal power generation capacity. The estimated thermal power
capacity of WAPDA is about 5131mw while the capacity of different IPPs
comes to the total of 5549mw.
Following is the detail of various IPP units
located in WAPDA's franchised area:
|
Kot Addu Power Company |
1,621mw |
|
Hub Power Company |
1,292mw |
| Kohinoor
Energy |
131mw |
|
AES Lalpir |
362mw |
|
AES Pak Gen |
365mw |
|
Southern Electric |
115mw |
|
Habibullah Energy |
140mw |
|
Rousch Power |
412mw |
|
Saba Power |
114mw |
|
Japan |
120mw |
IPP units located in KESC's franchised Area
|
Tapal Energy |
125mw |
|
Gul Ahmed Energy |
127mw |
The total installed capacity of the private power
producing units thus comes to 5549mw which proved to be a valuable
rather face saving support for WAPDA which was in deep crisis due to
drastic cut in water level at Tarbela and Mangla and other Dams, the
fundamental source for WAPDA for generating around 4,825mw of Hydel
power.
As a result of sharp decline of water level, the WAPDA's capacity for hydel power
generation
|
Tarbela |
3,478mw |
|
Mangla |
1000mw |
|
Warsak |
240mw |
|
Others |
107mw |
Actually, the proposal for setting up two more
units in the private sector is in line with the future course of
action to meet out the demand for power, which is increasing at the
rate of 8 per cent annually. A major step towards achieving this
target is the current efforts of establishing a direct link between
KESC and HUBCO. At present, KESC has to rely on the single link of
Jamshoro national grid of WAPDA to import power from WAPDA system.
Whenever this system goes out of order due to tripping of the system,
it renders the KESC totally in isolation from the national grid of
WAPDA. In order to overcome this problem, collective efforts are being
made by WAPDA, KESC and HUBCO to lay 8-km transmission line from HUBCO
to Baldia Town grid station of the KESC. By virtue of the second link,
the KESC will have direct access to 1200mw of power being produced by HUBCO.
Yet another project, which the KESC is negotiating
with a private sector company, is the wind-pushed power generating
units to be established in the coastal areas of Karachi, Pasni and
Guwadur. Two of these wind-power producing units of 20 megawatt each
would probably be installed near the Hawks Bay Shore. The KESC
management is pinning hopes to successfully meet the future demand for
power as soon as these pipeline projects come on the ground with full
participation of the private sector.
Load shedding
As usual, the summer in Karachi is not different
from what the people are experiencing for over a decade. Load shedding
or power breakdowns have become a regular summer feature of the
so-called metropolis where the industrial, commercial and general
consumers raise hue and cry over huge industrial and business losses.
The current spell of load shedding has become more
painful in view of the on-going exams of Secondary and Higher
Secondary Boards in Karachi. The students appearing in the exams are
groping in the dark to secure their future.
In order to explain reasons behind the on-going
power crisis which has gripped the city since last month, Brig. Shahid
Mukhtar has said that like consumers, KESC considers the load shedding
or breakdowns as the most undesirable thing, it is not the consumer
which suffers but KESC also suffers due to load shedding. Hence KESC
never did the load shedding intentionally. He said that last year KESC
had to resort to load shedding due to financial constraints as it has
no money to buy furnace oil from PSO hence it was forced to shut down
two of its power generating units. The situation is however different
from last year. The financial health is much better as compared to
last year while its entire generators are running to the capacity.
Currently, the KESC system is producing around 1150 mw out of its
installed capacity of 1750mw. The two IPPs supply about 250 mw in the
KESC system. However, the power demand during peak hours is estimated
at 1800mw. The gap between demand and supply was met through WAPDA
resources till March 21. Replying to a question, he said that
variation in the schedule of load shedding is due to uncertain
availability of power from different sources such as WAPDA which is
already struggling to overcome its own problems, while the KANUPP also
was not in operation on account of routine maintenance.
The current power crisis started when the
lightening damaging the two costly transformers heavily licked the two
WAPDA's Jamshoro.
To give an idea about the damaged transformers, the
KESC chief said that these transformers were not of the ordinary
nature. Each of them having a capacity of 350mw is as heavy as of 400
tonne. One of them was put on the line by using the undamaged parts of
the other units for temporary use, while a Japanese expert has been
specially called for restoration of the other one. He expressed the
hope that current crisis are likely to be over in a week's time. He
also said that he was in constant touch with WAPDA authorities on
day-to-day basis to personally know about the on-going restoration
process. WAPDA is however taking care of the situation and hopefully
the situation would be normalizing soon, he expressed the hope.
The KESC chief also floated an innovative idea to
over come the current spell of power shortage. He has suggested to the
industrial areas to work 7-days a week by observing holidays in
rotation instead closing down the units on Sundays. Observance of
holidays on different days instead of collective holiday on Sunday
would certainly reduce the consumption of power in peak hours. He also
suggested that the commercial areas be allowed to open on Sundays and
close their shops early in the evening instead of doing business in
the late hours. Doing business on Sundays would allow a large number
of people to do their purchasing on their holidays.
He however expressed the hope that the power supply
would be further strengthened with the arrival of a Korangi Thermal
Unit sometimes next week which will add about 90mw into the KESC
system beside addition of another 60mw from Karachi Nuclear Power
Plant (KANUPP) which is also about to come on line. The KESC chief
appreciated the efforts of Pakistani engineers who have kept the power
plant, which has already come to age. Its official age was 30 years,
which has been already, expired a couple of years back. KANUPP was
shut down after remaining closed for routine maintenance.
When asked whether the impact of reduction in oil
prices in the international market will be passed on to the consumers,
he quickly remarked that the heaviest expenditure the KESC has to
suffer is the cost of furnace oil. Over the years, the oil prices have
jumped from Rs550 per ton to over Rs1350 causing a loss of Rs11
billion on account of price differential.
Regarding the policy of shifting from oil to gas
fired system for power generation, the KESC chief disclosed that the
Korangi power generating units have already been shifted on gas while
remaining power generating units of Bin Qasim would also be totally
shifted in next two years.
Shifting on gas may not result in a substantial
decline in power generation cost as under the policy the gas price
will also be increased by that time. The maximum difference may be
around 30-35 per cent as compared to oil consumption, he said.
WAPDA and KESC owe around Rs15 billion to Pakistan
State Oil on account of fuel supplies and financial charges claimed by PSO.
Of the total outstanding dues, WAPDA owes about Rs4
billion to PSO, which include Rs1 billion as financial charges. The
PSO claims that the outstanding amount against KESC is Rs8 billion for
fuel and Rs3 billion for financial charges.
The KESC chief however did not agree to that amount
claimed by the PSO and when asked to comment said that KESC paying the
current bill almost in advance for purchases of fuel from PSO.
He said that he did not agree with the claims of
PSO for payment financial charges as the government has already taken
up and discussed this issue with the relevant parties. The KESC chief
however said that KESC owes Rs4 billion to National Refinery.
Similarly KESC is in good terms with Sui Southern Gas Company which
supplying gas to our satisfaction.
Employment
Regarding the reports of possible layoff in KESC,
which has strength of 12000 workers, Brig. Shahid Mukhtar strongly
denied the reports and said there is no such intention of the
management to layoff its staff.
Actually the reports appeared in a section of the
press regarding layoffs in KESC were due to some misreporting or
misunderstanding of the survey being carried out about the staff
members who have completed their 25-year in service. In effect, the
survey regarding 25-year of service is being carried out in all
government organizations under the directives of the government
however this survey was not carried unilaterally in the KESC. He said
that honest and hardworking workers have nothing to worry as we are in
need of competent and hardworking people. However, the dishonest,
inefficient, unwilling and corrupt people are not accepted in any
organization, it is not the question of the KESC alone, he remarked.
KESC T&D LOSSES
| |
1998-99 |
99-2000 |
2000-01 |
|
JUL |
37.8% |
42.5% |
44.5% |
|
AUG |
38.5% |
39.1% |
40.2% |
|
SEP |
34.7% |
35.7% |
36.2% |
|
OCT |
41.7% |
43.4% |
35.6% |
|
NOV |
31.1 % |
34.0% |
32.5% |
|
DEC |
34.1 % |
33.0% |
36.0% |
|
JAN |
28.6% |
29.1 % |
33.7% |
|
FEB |
29.7% |
39.1 % |
29.4% |
|
MAR |
41.8% |
49.2% |
40.2% |
|
APR |
43.4% |
44.4% |
— |
|
MAY |
45.2% |
50.0% |
— |
|
JUN |
48.0% |
38.0% |
— |
|
AS AT |
38.6% |
40.2% |
37.0% |
|
