The electricity and the POL products are considered
as the engine of economic growth in the today's world.
Despite having a strong manufacturing base, the
developed economies never allowed the price of the electricity and POL
products to go beyond a certain limit to refrain from any adverse impact
on investment climate, competitiveness of the existing industrial sector
and above all the living standards of the people.
Unfortunately, this is not being practiced in our
case and the utility services are being used as the revenue and tax
collecting agencies rather than using them to facilitate the economic
growth and improving the living standards of the people.
It was policy of the government in early 90's to
enter into power purchase agreement with Independent Power Producers (IPPs)
which played havoc on our social and economic life due to adverse impact
of high cost of power on the general prices. Consequently, the
purchasing power of the common man was severally hit besides it proved
as a stumbling block to our economic growth.
It was the electricity price which stalled investment
in the manufacturing sector, which was the only major source of
providing job opportunities to the skilled and non skilled work force at
a massive scale in Pakistan. However, it was the cost of electricity
which closed down the doors for job opportunities to the people thus
adding to the economic sufferings of the people.
The government was actively considering cutting high
electricity rates in Pakistan. The task force and the committee set up
by President General Pervez Musharraf to evolve recommendations for
reduction in electricity rates have prepared their recommendations. The
decision to cut in power rates is being taken in the light of the
recommendations of these two bodies. Informed sources were of the
opinion that one of the government levies such as fuel adjustment
charges or additional surcharge on the consumption of electricity may be
done away with prior to the federal budget for 2004-05.
In fact, the reduction in power price has become
imperative in the face of implementation of WTO rules due on January 1,
2005 which would lead to an open competition in the world export market.
In that situation, survival for the fittest will be
the name of the game.
Another major development in the Karachi Electricity
Supply Corporation (KESC) system is its shifting from fuel oil to
natural gas bringing a major cut in the cost of power generation.
Similarly, WAPDA has also succeeded in switching over a large portion of
its thermal generation from oil to gas which has been gifted by almighty
Allah to the people of this country. On the other hand, WAPDA which is
largest power producing company in Pakistan has recently added Ghazi
Brotha Hydel Power project to its strength. Moreover other hydel and
coal-based power plants are also in the pipeline in collaboration with
the friendly country of China especially at Thar coal field and Lakhra.
New power generation units were set up in both the public as well as
private sector, the installed capacity of electricity generation
increased from 13.0 Giga Watt in 1996 to 17.4 GW in 2000 and
subsequently to 18 GW in 2002. The increase in the installed capacity of
the country during the last two years was brought about by the addition
of Chashma Nuclear Power Plant 325 Mega Watt, Chashma Hydropower Project
184 Mega Watt and Liberty power 235 Mega Watt. Besides the addition in
hydel and nuclear capacity, China has also joint hands in the coal-fired
power generation under which two coal fired units of 350 Mega Watt each
are also planned at Lakhra and Thar coal fields.
All these positive developments have placed the
present government in a position to give the happy news to the people of
this country who are paying then price of the folly of the previous
governments. It is funny that the electricity in Karachi is being
produced on gas fired system, yet the consumers are being charged with
fuel adjust charges. They have to pay surcharge, additional surcharges
and other government levies.
All these levies on different essential items were
imposed as corrective measures for improving the macro economic
fundamentals of the country.
The economy has come out the crisis of 1990s, exports
target for the current financial year is well within reach, reserves
have cross the mark $12 billion, the government has overcome the losses
it had to suffer on account of state owned corporations, as major public
entities have already been privatized and the remaining are on the
cards. KESC which was running in huge losses has also managed to
overcome its losses by effective recovery, control on power thefts and
other financial discipline which have raised the hoped for the KESC
management to become a profit making company in the years to come. The
people of this country are waiting for the happy news as recently
indicated by the minister for power for a cut in the power rates.
The task force on electricity and the committee
appointed by President General Pervez Musharraf have finalized their
recommendations for reduction in electricity prices.
Informed sources were of the view that electricity
rates for the consumers in Karachi would be brought at par with the rest
of the country. Since KESC has shifted its power generation system from
fuel oil to natural gas, there seems no justification for carrying on
the Fuel Adjustment Charges (FAC) levied on electricity consumption in
Karachi. The announcement for reduction in electricity rates may be
announced prior to the Federal Budget in June next.