An interview with Zubair Motiwala.

SADAF AURANGZAIB, Senior Correspondent
June 11 - 17, 2007

PAGE met recently with Mr. Zubair Motiwala to talk about how the current power crisis has been affecting SITE industrial area and his views on possible solutions.

PAGE: How badly is the current power crisis affecting industrial productivity?

ZM: We can't talk only about industry being affected by the ongoing power crisis but it's the whole of Karachi that is under darkness. Even though that there is no load shedding in our area, industries are losing on their productivity. When our labourers, our officers, our production managers cant get enough a proper nights sleep, this surely affects their productivity. It's an indirect effect on the industry both on the production and on the quantity. Of course KESC is responsible, we need to discuss as to why are they doing it, what are their hurdles and why can't they reduce the load shedding.

At the moment there is no load shedding in SITE industrial area. It is not that KESC is showing preferential treatment to us, this is a result of a continuous effort of the last five years. I was on the board of directors in KESC from 1999-2003 and I again had the opportunity to take up the same position.

I belong to SITE industrial area, my factory is located in this area and I was once chairman of SITE area, hence I worked hard for the uplifting of this area. This included the laying up of a feeder, substations, installations and so on. We made it possible that a 132 KVA line be installed in the area. We even negotiated with the fellow industrialists to let them install big towers and that made it possible that they can supply the load to the industries of SITE without any problem.

Today the position is that KESC can not supply the power even if they have the power because of the poor infrastructure of transmission and distribution. But yes, they can supply to the SITE area because the enhancement program that was carried out and which continues today. What you see today is the effort of 5 years, serious budgeting efforts and persistent negotiations with KESC to ensure that load shedding does not come to SITE. With BMR continuing, we will face shortages again soon.

PAGE: Are the residential areas connected to SITE also not affected ?

ZM: The residential area connected to SITE is also not affected. KESC has the cables of the capacity that they can supply power to the industries because now they have parallel cables and the system has enough capacity to distribute power. In our struggles of 5 years, we actually advocated ourselves as the only consumer area where consumers pay 97% of their dues. Utilities will naturally want to continues supplied where they are getting their returns and minimized defaults.

PAGE: What about other industrial areas?

ZM: Other industrial areas are also being prioritized in the manner that they are suffer load shedding to the minimum level whereas SITE not at all. This is the first year we are not having any load shedding. It's a good sign for the industries but still we feel that every citizen should get the electricity as it is their life line.

PAGE: How much would you say the government loses with current load shedding?

ZM: Fifty five billion rupees is the subsidy which the government of Pakistan gives to WAPDA so it is a clear loss in terms of pilferages, in terms of non-payment of the bills, in terms of the subsidy given to the domestic sector and low income group. Over and above WAPDA loses about 12-15 billion rupees plus KESC loses 12 billion rupees per annum. These are the loss figures of the utilities which now after privatization becomes a bit stable as government is pouring money in KESC.

PAGE: How do you see the current situation?

ZM: We are very disappointed as on one hand the government wants an increase in exports, on the other hand it is unable to supply electricity so this sends very contradictory and incomprehensible messages. With this kind of scenario prevalent in Karachi, people are increasingly frustrated by the whole situation. Even in hospitals doctors can't help anyone because of having no electricity. I think that the government is responsible to supply the electricity in required quantum and at affordable rates.

PAGE: Why has the government been so lax in creating and executing an effective Power Policy?

ZM: I can only say that the government has failed in fulfilling this responsibility. The prime responsibility of the government is to make the country a welfare state where every one has the sovereignty to have 'roti, kapra aur makan'. Many a times I brought the issue in front of the president that unless we have a sound infrastructure of the transmission and distribution, nothing can be resolved. We don't have enough transformers, enough cables, enough substations, enough grids and feeders so in order to have a firm supply, the entire system needs to be intact and then only can you progress. The managing director General Amjad is of the view that things will not be better until March 2008! So no matter how many tyres are burnt, how many people come out to the streets, nothing is going to happen as they are unable to do it. I think in order to solve the problem, we all should plan an uplifting strategy starting in areas where only 20% uplifting is needed and is dealt with on a priority basis and then proceed to the pockets where there is 40%, 60% or 80% uplifting required. In that way, we would be able to save one area after another.

PAGE: What alternatives can our industries use to generate power for their usage?

ZM: I think generation using gas is the most economical way to give industry a relief so that they can continue with their production, this has been suggested to the policy makers. It is no less than a surprise that we have a duty on import of generators which are less than 250 kilo watt. It is not rational thinking as the government can not supply the electricity and they are front loading on the imports of generators. There are many SME's which uses less than 250 KW. They must be given a relief. I went to Bangladesh and found out that there are different gas rates for the captive power plant and for the normal use of gas and this difference is almost 20%. When I asked the Commerce Minister as to the reason for this, he replied stating that the government of Bangladesh is paid to provide electricity to the doorstep of the industrialist. This penalization is the drive to ensure that they produce enough energy to satisfy demand and then to abolish the 20% subsidy. This is the approach of problem in Bangladesh. There is a way. You can reduce the gas prices for the captive power plants by 20-15% and give manufacturers gas generators, this will give you enough spare power to be distributed else where. I think in the coming budget where the government is keeping Rs. 520 billion in development programs, the government should invest in these kinds of projects that will help both the industrialists as well as the common man.

PAGE: We have learnt that almost every big industrial unit has its own power generation, is that true?

ZM: Every large unit has put up its own plant. In SITE and Landhi, everybody have their own small generation. If this would not have been there, things would not be possible for the industries in terms of meeting their productive ability. Right now SITE is utilizing 250-300 MW and we do have these sorts of captive power plants by large industrialists. We have both the KESC and the gas but the larger units has only got gas so to spare few extra KW and MW for KESC to distribute to other areas. This also saves the extra load on the KESC distribution system. If the government brought in the policy which I talked off, people will definitely convert to gas power generation because that electricity is cheaper.

PAGE: Any last suggestions?

ZM: We have been giving suggestions to the government every now and then. I think the government should concentrate on the growth population in Karachi which has a 6% annual growth. The basic responsibility of the government is to provide Karachi with the basic amenities of life and the foremost is electricity. At the time of KESC's privatization, I told the authorities that not to privatize it in one go but it must be bifurcated into a generation unit and distribution company, that's how they have done it in Faisalabad, which is FESCO, they have done it in Hyderababd which is HESCO and so on. Even by curtailing the theft and pilferages, HESCO remained able to reduce the tariff which we never had. Now the new owners are running KESC but still the agreement is unknown to us.

My suggestion to the government of Pakistan is to start a new chapter, start accepting KESC as a life line for Karachi as when you start realizing this, then you will have a different view point to look at things. KESC is trying to manage well. Instead of criticizing them, let's help them. We cannot undo the past mistakes but what we can do is to help them by giving more electricity through WAPDA, inviting more IPPís in the near future at the rate that is prevalent in the region. We need to offer competitive rates, otherwise companies can choose other regional options and leave us behind.

The Government has to bear that as a public development program and they have to spare some money so that people can live happily in this city. Government already had all the details regarding the development needed, The only thing from the government that is lacking is political will. The saying goes "When there is a will, there is a way!"