POWER CRISIS LOOMING LARGE OVER KARACHI

Interview: Syed Sibte Ahmed Jafri, Chairman IEEE

SADAF AURANGZAIB, Senior Correspondent
Feb 26 - Mar 04, 2007

The Institute of Electrical and Electronic Engineers (IEEE) is one of its kinds in Pakistan.

It is mostly working in relation to the fields attached to it but it is also working towards disseminating the knowledge to the common sections of society. We met the IEEE Chief Executive, Syed Sibte Ahmed Jafri and the discussion was revealing in its true sense. Let's share his views:

PAGE: First of all tell us a little about IEEE, how does it function and what role it is playing in bringing stability in the power sector?

SSAJ: Well, IEEE is an organization of electrical and electronic engineers and it has been functioning since 1960's. At one point there was only one such institute i.e. the Institution of Engineers Pakistan. Since we had to cover a lot of activities, our electrical engineers formed the Institution of Electrical Engineers and this has been renamed as Institute of Electrical and Electronics Engineers because these days a lot of electronic engineering is related with electric engineering so this took place about five to six years back that we renamed our institution and covered both the fields in one organization. Its head office is located in Lahore, with its chapter in Karachi. I am the chairman of the local centre and we have a local council which governs the activities of the local centre. And the head office has a central council which governs the activities of the whole of Pakistan. Every year, elections are held and every year the chairman is supposed to change. It is a non-profit organization. It is normally run through the contribution of its members but if we want to organise an event or symposium or a seminar, then obviously we have to go for donors and people for advertisements. All the time the purpose is not to make money but to redistribute in kind. It was basically formed for the dissemination and exchange of knowledge in our field but we have also touched from time to time very specific problems that have been faced by the people and which are also related to our field. This year we are organizing the symposium on "Booming power crisis in Pakistan". We are organizing this symposium in cooperation with e-commerce because they are having a major event at the same time so we thought that if we join hands then a lot of other things will benefit us, as a lot of papers will be presented during the symposium so the people will benefit out of it.

PAGE: But how IEEE is playing its role in bringing stability in the power sector?

SSAJ: It is a very difficult and gigantic task to bring stability in the power sector of this country because things have become so bad that it will take years before something like this happens.

Everybody has to do a little bit in this regard, whether it is government, or private sector or individuals, etc. IEEE can do a little more than you and I because it is a gathering of professional engineers and people who can think, act and try so in that way we can help but one should be matured enough to understand that you or I can be helpful to the extent that somebody is prepared to listen to us. If nobody is prepared to listen to you then you can't do anything so the reason that today we are facing this crisis is because people have not been listening to the professionals who can probably give them the advice from their experiences and tomorrow what will happen I really don't know. I have a very strong feeling that they are still not listening to reasoning and they are going for ad-hocism and therefore such a situation may create more and more problems.

PAGE: Electricity is the prime concern of economic and social development; being a professional what would you suggest to enable the country to ensure uninterrupted power supply at an affordable price for trade and industry and for domestic consumers?

SSAJ: Your question is in three parts.

How can we have sufficient electricity,
How can it be reliable enough and
How can it be affordable enough.

The first and the last are interdependent because if we have sufficient electrical power then the end product will automatically be economical. Anything that is in shortage tends to be expensive so first of all if we have abundant electrical energy then we will be having it on economical basis compared to what we are having it today. The most important thing is the source. Now the source of electricity is usually based on some sort of a basic fuel. You have gas, oil or coal. Gas is by far the most economic but the coal has not been given the due chance for a number of reasons. Furnace oil is primarily a very expensive source of electrical power but not only more of our thermal electrical power generation facilities are based on furnace oil but also at the present point in time at least 1500 MW to 2000 MW of projects are being very seriously considered by the government to be put on furnace oil and these projects are called "Fast Track Projects". And they are called fast track projects because furnace oil based engines can be installed very quickly in just two and a half year time as against other projects which can take four to five years. Since in the coming years, there is going to be a very serious electrical power shortage, the government is adopting this option but then you are going to have even more expensive electrical power compared to what you are having today because today about 40% to 50% of electric power is from hydel and the rest is from thermal. If you go into the next phase which is going to take place in the coming years, probably 70% of electricity might be based on furnace oil which will make it very expensive so it is clear that in the long run the only way you can have electrical power which is within the reach of the common people of Pakistan and which will also contribute to a cheaper electricity in the trade and industry is based on hydel power. So far not enough concentration has been laid on this front. People are trying, people have tried but that is not enough. I am not trying to challenge the efforts being made by the government but am just telling the net result. The net result is this that not enough electricity is being generated from the hydel source and therefore the net effect is that the electricity is very expensive and will continue to be more expensive with these new projects coming in.

Another part that you have mentioned is about the reliability of its availability. Now reliability is like this, if you are generating electric power here and you are taking it to 30, 40, and 50 or 100 miles, it depends upon the means you adopt to transport it from one point to the other which is described as "Transmission and Distribution of Electrical Power". Now the transmission and distribution of electrical power has become increasingly less reliable because:

System has become obsolete and once you hold a system like that then obviously it will trip, it will burn as in the case of grid stations which you might have heard that certain grid station burnt out, etc.

Since it has become obsolete, therefore, it requires replacement and rehabilitation and not enough is being done on that account and you need millions and millions of rupees to go into proper distribution and transmission of electrical power. Unless that happens even then you may have sufficient power generation capacity available. Even if you may have adequate availability of power, it may not be reaching you and I because of the poor infrastructure and if it does then it may have a lot of losses and the losses then have to be made up by additional generation capacity because it is being said that today almost 30% to 40% losses are taking place. It means there is really a genuine technical fault so if you improve your transmission and distribution capacity so that this 30% becomes zero, it means that you have increased the power generation capacity by 30% which will immediately meet our power shortage so this is a very serious matter but not enough work is being done in this direction.

PAGE: How do you see the current situation of power supply especially after the privatization of KESC? Did the change in hands in KESC would serve the prime purpose of bringing a positive change on the back of power crisis faced by the people of Karachi?

SSAJ: Well, you live in Karachi, I also live in Karachi and I guess you and I know that it has gone worse from bad so that's a simple answer to your question.

PAGE: But the recent KESC management said that they are working on the infrastructure. Mr. Frank is quite optimistic about KESC's future. Do you think efforts are really being made or do you think that it's all in vain?

SSAJ: I have a very serious problem as I am a senior person and rather skeptical. You people who are young are always optimistic. Now I have been hearing in this country a lot of things about many things like law and order situation will get better tomorrow, etc. Whatever Mr. Frank says I trust him, but I and you have to see the result.

PAGE: They also said that the electricity condition will be far better after 2008 and there will be a continuous power supply, do you think that it will be going like that?

SSAJ: The electrical power problem started in this country around the year 1982. Slowly and gradually the whole of the country has started facing this problem. We are hearing a lot of promises from all quarters. You may or may not have read it, you may or may not have heard it but I have personally attended such seminars etc which were addressed by no less than the Minister of Water and Power at that time, who was saying that we have surplus energy and we are going to export it to India, to East Punjab etc. Today the position is this that they do not have enough power to give to Karachi which is the part of the agreement that they are supposed to give 500 MW to Karachi so we hear a lot of things, whether it is from X or Y but what will happen in future, I think one needs to be an astrologer to predict the situation.

In my opinion there is going to be such a serious power shortage which you would have never ever seen in the city in the past. God forbid, I will be the happiest person if I prove wrong.

PAGE: No doubt electricity is the driving force for the economic growth not only in Pakistan but elsewhere in the world, what would you recommend for a stable power situation in Pakistan in the days ahead?

SSAJ: Presently, in the coming few years I don't see any chance but if the present setup stays, if the present Prime Minister and the President stay then I see that in the coming five years there might be a number of hydel projects coming up. But hydel projects take time around six to seven years and big projects take longer period than that. We need some big hydel projects like Tarbela through which we are drawing 3000 MW to 4000 MW of electricity. Water is your resource and it's for free and it doesn't hurt your other resources, it is there for years to come whereas gas will finish in 10 to 15 years, coal will finish in 30 to 40 years, oil may be in 10 years then what next. So in my opinion if these long term projects materialize then in the long run we have a good hope but we have delayed these projects considerably and even now if the government changes and the new government takes the charge then these projects will again be stopped and they probably go for thermal projects which are very expensive.

PAGE: The major problem of electricity as you have mentioned was started way back in 1982. How does it get started and how it became such a big problem that today we are on the verge of collapse. What are the major problems of power situation and today what sort of problems this sector is facing?

SSAJ: Till 1982 the KESC was being run independently, WAPDA was also running independently, they used to have their feasibility studies. They would go to the international banking organizations, financial organizations like World Bank, Asian Development Bank and they would get loans from there. They would then go for the tenders, for the consultants, for the manufacturers and the projects would be installed and so on and so forth. And that's how all the projects in that period came about. Around that time World Bank and Asian Development Bank told the government that you can't invest these loans in the power sector, you will get loans for the infrastructure and it has to be invested in other components of infrastructure like roads, bridges, hospitals, schools, etc. For the power sector you have to go for privatization and that is how this concept of what is now famously known as IPP came into picture. Independent power producers were facilitated by the Word Bank which opened a window with NDFC and provided them with exceeding money and many other (around 14-15) different financial institutions indulge internationally came into that group and money was lent through NDFC and a number of projects came up during the days of Benazir Bhutto. A number of projects were proposed, out of which some didn't come up but at least 16 projects materialized making a total of about 3500 MW-4000MW capacity, including HUBCO.

Now there was a time gap between the people coming into the IPP arena. The moment you go for a change of a system from one to another there appears a gap. At that time, there were numerous projects both by KESC and WAPDA which were planned and ready to be installed through the normal course of the things. They were all stopped and therefore obviously the change in the system took time so there was a delay but subsequently these projects came one by one and no doubt there was sufficient or more than sufficient electrical power available. From my point of view it was not more than sufficient as a technical person but purely from arithmetical point, it was more than sufficient and that was a period when people were talking about exporting electrical power. The second thing that happened whether fortunate or unfortunate was that many people thought rightly or wrongly that a lot of money has been made on these projects and the result was that many people who were involved in these projects had to face the brunt since the Prime Minister and her husband were blamed but they couldn't be punished. But the other government functionaries have to face the brunt because this is how accountability always goes. Whether right or wrong, that's the way its works. Now once again it is made very clear that power shortage has to be built up. Whenever there was a question of a new project coming in, any body's sitting on the seat of power who could sanction it did not look at the merit of the project as such but looked at this that how can I save my skin if I can get caught tomorrow. I went with a project at that time to the General Manager of WPPO and I said that well this particular party has come from USA, they want to put up a project of this capacity, lets talk about it. He said that we want the energy at 3 cents per kilowatt hour and I said that it's totally unworkable and they said that's our present situation, we can't give you anything more. So the party took its briefcase and went back to USA because the minimum tariff at that point was 4.5 cents. Now that gentleman who said 3 cents, he himself knew that this 3 cents is not workable but he didn't want to take a chance that tomorrow he might be caught and facing NAB etc so this went on for a long time that people who came in were given ridiculous tariff. All of a sudden, about a year or two before, it has become clear that there is going to be a dire emergency of electrical power. Would you believe that presently the government is calling people and saying that we will give you 11 cents and they are not coming and there are saying that it is also not sufficient so if nobody is coming to put up electrical power, then how would you have it?

PAGE: In order to remedy this current situation what suggestion do you have?

SSAJ: Unless the tariff that is offered to the people is sufficient for them to make money, they will not put in the money. You give a tariff of 11 cents which I mentioned is built on the furnace oil and furnace oil is going to be expensive so you have to give tariff based on gas price, now gas is not available. It is said that the gas would be available for another seven years. If they are able to sign this India-Pakistan-Iran gas pipeline project and it starts giving gas, then the problem may be solved. I am not trying to become the Prophet of the Doom but I only want to say that if they have to do these things on interim basis, it should be done in such a way that they are able to make use of the gas once it is available, so may be for a short while you will have high tariff but then subsequently it will go down and simultaneously they must adopt very high incentives and steps for people who are prepared to invest in hydel sector. Also the government should be prepared to pay the money to WAPDA if they are able to put up some hydel projects. Government gave them money for one project that is Neelam-Jehlum 900 MW. It will come up. Government should not stick to total 100% privatization, especially for hydel sector.

Coming to the Karachi Electric Supply Corporation, I can make no comment on this because it is now privatized. 75% of its shares are in the private sector, the group has a lot of money so money is not a problem. The technology being made available to KESC is from Siemens. Siemens is a German-based very high technology company especially in the field of power generation so nobody could tell them as how to run it and the other fortunate part is that the Siemens also makes transmission and distribution equipment in Pakistan and abroad so the whole right mixture is there. You have a person or group who have money, you have a person or company who are able to manufacture, deliver, install and commission so there is nothing you and I can tell to KESC what they should do or should not. Now if they are unable to do it then there is nothing anybody can do.

ANNUAL ELECTRICAL POWER PRODUCTION FOR 2005

COUNTRIES

TOTAL POWER PRODUCTION
(INCLUDING NUCLEAR) GWH(E)

NUCLEAR POWER PRODUCTION
GWH(E)

India

555000

15734

**Pakistan

93036.457

2547.9

China

2474700

50329

Japan

957029

280671

*USA

4037392

780465

UK

378450

75170

*Estimate
** Annual Electrical Power Production for 2006
Source: Power Reactor Information System
GWh = 1000 MWh or 1 million kWh

PAGE: What other alternatives are available apart from furnace oil based thermal projects which we can use on emergency basis?

SSAJ: Other than that you can obtain a lot of sets on the rental basis from international market. The same thing which you are otherwise installing into a power plant to run it, you can bring it on a rental basis and run it for example for three or four years and once you have other projects available then you give them back. WAPDA has already entered into rental agreements, one with GE, General Electric of USA and other with ALSTHOM, a French-based company. These are rental sets which will be installed around Lahore and the contract is for three years. These are gas based sets. These will be installed in six months. This is the shortest possible way. They have already entered into two agreements, if they want to, they can have 10 such agreements.

PAGE: What alternative options and infrastructural development would you suggest to have a balance and independent power supply in Karachi and in the country?

SSAJ: In the city of Karachi, all the plants are in place. It's only a question of placing orders, buying it and installing it. Similarly on all Pakistan basis, WAPDA's design department exactly knows what needs to be done, they exactly know what is to be bought, they exactly know how it will be installed. So it is a question of the will and availability of funds.

PAGE: Do you think building high dams is the only option available or there could be alternatives to address the issue?

SSAJ: When I said hydel projects, it does not mean high dams. There are lots and lots of hydel projects which are of 40MW, 50MW, 200MW, 500MW etc; these are river-run projects. You don't have to make a dam. In Northern Areas, there are many rivers, now this power is available in the water, what you need to do is to make a very short stoppage point. The water starts rising and there you put a turbine and it works. Kalabagh, Bhasha are welcome but today there are hundred river-run projects.

PAGE: How much time these river-run projects would take?

SSAJ: No such projects will take less than five years. The reason is that these rivers are in difficult areas and you have to build tunnels. Now making of tunnels take time, then you have to make a feasibility etc so it takes four to five years. High dam projects will take 15 to 20 years.

PAGE: Lastly, would you like to share your views regarding upcoming power ventures that the government is taking to develop with the power sector on sound footings?

SSAJ: The government is mostly taking ad-hoc decisions, which is never a good thing. You must have a comprehensive well planned policy which you should take from all corners. Presently, the extreme worries and concerns they got is that there is going to be a very very serious problem of electricity in the whole country for the coming years so they are working on what they can do in two or three years time but they are not thinking about as to what would the condition after four years, etc. The problem arose after 1994 when many power projects were floated but nothing serious was done. There should have been a structured planning through all departments which are in place. Unfortunately all the departments are there but the actions have not been there because immediately after these projects came in, the whole missionary was after the people who were instrumental in putting up those plants and there was such a witch hunt going on that everyone who was connected with the projects of power must have said to himself "never again". So now they are once again coming up and I can assure you in three years time when these fast track projects were on, there will be a lot of hue and cry that how come you criticized Benazir on 6 cents tariff, as today you are giving 12 cents so there will be a lot of questions.

PAGE: Any message would you like to give to the readers.

SSAJ: In my opinion - not as a Chairman of IEEE but as a person who has been associated with the electrical power sector for the last 30 years - in a country like Pakistan, we just cannot afford to give water and power projects in the hands of private sector because this is like giving your life in the hands of somebody who is going to make the profit out of your life and yes may be 20 years down the line, when people become very highly educated even from your local resources you can put up plants in private sector for people who are sufficiently civic minded but even then I would oppose the idea because there are so many other things that can go to the private sector and where you can permit them to make money legitimately. It will be a big burden on the poor people otherwise. It should remain in the public sector. At one point in time it was unheard of electrical power shortages or failures, if something like that happened, the managing directors were all in the headquarters throughout the night till the power is restored so it was then in the public sector, it can again function well in it. When WAPDA came into being, there were a lot of smaller companies like Rawalpindi Electrical Supply, etc. which later became a part of its fold. It was so reliable that all these companies voluntarily merged into WAPDA. In that times, there was no shortage of electricity in WAPDA system. But today the situation is entirely different; any industry which can afford is either having its own power plant or is planning to have it so it means that not everyone can be wrong, so the policy is rather wrong. If the World Bank or Asian Development Bank is asking you to do it on their experiences, we need to see the situation in our own experiences and our experiences should have the privilege to be applied and worked upon.

PRIORITY HYDROPOWER PROJECTS, APPROVED FOR CONSTRUCTION (PHASE-I)

Sr. No

Name of Project

Location

Installed
Capacity (MW)

Status

Study

Construction

Type

Cost (Rs. M)

Tentative (US$ Mil)

Period (Years)

1

JINNAH HYDROPOWER PROJECT

Punjab

96

F

D

10

786

4

2

MALAKAND

NWFP

81

F

D

10

80

3

3

ALLAI KHWAR HYDROPOWER PROJECT

NWFP

121

F

D

0

8578

3

4

MATILTAN

NWFP

84

F

D

35

110

4

5

KHAN KHAWAR HYDROPOWER PROJECT

NWFP

72

F

D

0

311

4

6

DUBER KHWAR HYDROPOWER PROJECT

NWFP

130

PF

D

0

9754

4

PF - Pre-feasibility Study Completed
D - Detailed Engg. Design Complete
F - Feasibility Study Completed
Source: WAPDA