An Interview with Syed SibteAhmed Jafri

June 11 - 17, 2007

Pakistan is blessed with unlimited natural resources, plenty of sunshine throughout the year and includes a massive wind corridor in Sindh. The velocity of wind in some of the coastal areas is strong enough to run turbines and generate power. Solar parks can also be established in the coastal regions of Sindh. There is plenty of water in the northern areas where mini-hydel power plants can be installed. Then there is also a huge possibility for biogas production.

Why then we are lacking in generating power even for the normal life of our citizens? In order to understand this, PAGE contacted Syed Sibte Ahmed Jafri, the Chief Executive of Trans Atlantic Energy, who gave us a brief view on all these developments.

PAGE: The World Bank, in its latest report on "Pakistan's power sector", has showed great concerns over the sluggish pace of investment and widening of supply and demand in the power sector. Just how severe is this gap? And when can it be bridged?

SSJ: Well, first of all the gap is much more serious than what an average man can see. And from the efforts that appear as being done and the results that are coming forth, I don't foresee the problems will be solved for years to come.

PAGE: It is stated that an annual funding requirement of $100 million investment is estimated in the power sector till 2010. It is also suggested that an additional annual investment of $200 million is required for modernizing the distribution network. The overall investments/funds would amount to about $350 million per annum. Are these realistic figures?

SSJ: Well, these figures are quite realistic but the only problem is that every project that has been planned or appears to be planned is getting postponed and the gap between supply and demand remains constant. If you delay the execution of the projects then the shortage will remain constant. For example if today the shortage is 1500 MW and today you are able to put up some plants in a year or two or three years time, and these projects are of the capacity of 200MW or 300 or 500 MW then in a year's time that shortage might once again risen to another level hence the gap continues to sustain because of the pace of development. In order to catch that pace, we need to make a quantum jump. Here we need not to question the investment but think about the physical timing as any reasonable project requires three to five years time to mature so we are already very much behind the schedule.

PAGE: We are witnessing growing public unrest, especially in Karachi, with the frequent breakdowns and load-shedding. What can be done to prevent this tension from escalating?

SSJ: In my opinion, government needs to be very sincere and serious about this issue. It should be given the top priority.

PAGE: What alternative options are available to be targeted in order to get the maximum in the shortest possible period of time?

SSJ: We are going from one ad hoc solution to another ad hoc solution. We might as well go on to a total ad hoc solution that is to obtain a huge number of sets on rental basis. Rental basis sets are available in the international market in large numbers. These are power plants. For example, WAPDA has already taken two plants of 150 MW each, but we should think as to how the gap of 1500 MW can be met by having two rental sets of only 300 MW altogether. This is quite an imbalance situation. The question is that when you can take two why you can't take ten when the situation is more than worse. I want to ask the authorities that if your child is crying, would you buy him something or would you let him cry for another ten days that he will get used to it in days to come. This is presently what is happening. I want to quote an example here when there was a problem of this nature arose during Iraq, Iran war, what Saddam Hussein did was that he air freighted generating sets of 30 to 50 tones from all over the world where he could get it from. He was of the opinion that his people should not suffer because that could create an immense demoralization in people.

Here there is a total demoralization where our people are facing immense problems so I would say that if the government is really serious then they have to take drastic effort and that means that get the sets of different capacity like from 150MW to 1000 MW for three years period on rental and place them on all the load centers all over Pakistan.

PAGE: Will it resolve the crisis immediately?

SSJ: These sets are normally available in three months notice. The people who have these sets obviously want to make money because they invest money and keep the sets ready for such eventualities. But the government should consider that it has an obligation to pay for the sufferings of the people, if government cares about its people, then that's the option they can use. In that way the government will be in artificial relief of three to four years during which it can work upon different other projects and make things happen. The difference of the cost which the government would be spending on rental sets hence could be adjusted over a period of time.

PAGE: It is said that the coal, nuclear and gas, mini hydel plants, solar parks and wind energy can be used to overcome the existing power crisis in the days to come but the technology for harnessing the power of some of these sources, particularly wind and solar energy is expensive. What would you think could be the best option in all of these keeping in mind the Pakistan's economy?

SSJ: Well, you have mentioned four different technologies and these all are tested and tried so therefore it's not an Einstein formula or an invention of a wheel. It's all available in the international market, you just need to go and pick it up. As far as cost is considered, everything depends upon your priorities. If you want something fast then you pay for it in the long run by higher energy cost. The thermal project comes very fast. A thermal project based on furnace oil comes fastest but the cost of energy from a furnace oil based project is very high and it affects you right through the life time of the project. Now on the other hand if you take a hydel project, the operating cost is very low. It takes time to get matured but once it is there, it gives you service year by year on a low price because there is no fuel involved and after few years the financing cost would be finished and then you can go on without any further cost and expense as it can be maintained on a very low cost. So all these things are workable and you have to plan according to your priorities. You can plan to use all the technologies and can also distribute the power load between them.

PAGE: But if the government would not be willing to delve in all of these options at one time, how can we then take transition from one source to another?

SSJ: First of all, there are so many hydel projects that can be harnessed and there has to be very serious effort on the part of the government to harness as many power projects as they can and if need be they can even set up a separate ministry for that because the present set up is so much used to doing the projects on thermal so may be the mindset is a little different. As for an expensive power project not only one pays highly but it also affects the development as the cost of electricity affects the cost of everything so hydel projects must be given a top priority. We can have up to 40,000 MW of electricity through the hydel projects.

Secondly they are doing a lot of work in the wind side but it's not enough because no real project is coming up. They have given letter of intents to over 100 people, each of them can set up to 50MW of plant so it's a 5000MW worth of wind power so the government has to follow that up strongly. The wind energy also comes fastest, i.e. in just two years time. If the people who want to put up the projects are demanding a little higher tariff then let it be addressed on a prime level. If these projects starts coming in they you can have wind power, hydel and thermal projects as you may have to have few thermal projects but they should not be given the top priority. In the mean time, the government can use rental sets for the power generation purposes.

PAGE: Do you think that the conservation methods in the National Energy Conservation plan will be effective?

SSJ: It is not being effective and this is very unfortunate as what government proposes, people disposes in this country and an average person is unable to respond to any appeal from the government though it is very genuine. And this is the question of inbred indiscipline. I think people should cooperate as it will also save money on their own end.

PAGE: There are reports that 1,000 watts of power are to be imported from Tajikistan and Iran separately. How far away we are from realizing these imports and what effect will they have on the current situation?

SSJ: I think we should stand on our own feet and make our own way for the future.

PAGE: What is the latest situation with Thar Coal? There has been a lot of talk on this subject. How quickly can these huge reserves be turned into usable electricity?

SSJ: A lot of people are interested in that but the problem which also made the Chinese company Sheng Hu to walk away is the bureaucratic attitude. The fighting on the tariffs was there for 18 months and if they walked away there must be genuine reasons with them. On the one hand you are giving 12 cents to the so called fast track projects and you are not willing to give 6 cents to the Chinese who are going to develop Thar coal. That's totally an inflexible attitude of the government which made them turn away and pullout.

PAGE: The government had planned five major initiatives to meet these energy requirements under the Energy Security Plan. Tell us a bit about that. In view of all this futuristic approach, nothing seems promising as nothing has been delivered so far, what predictions do you carry with yourself for the future?

SSJ: I only say that I am not directly involved into what government is doing at the moment but I would only say that any plant anywhere can turn into a success story if all elements in it do whatever they are supposed to do. I am sure that the goals are getting farther and farther away.

PAGE: The current government is all out to continue current growth levels? How achievable will be their targets be if the current energy crisis is not resolved?

SSJ: They are getting into a very dangerous situation because if an investor from Europe, USA or Middle East wishes to invest in this country, he first of all expects the law and order and availability of basic amenities like electricity, water and if the situation like this will persist for long, we would not be able to have more investment coming in through different countries. This is a war like situation and must be fought on a firm footing.