WHY LOAD SHEDDING?
REASONS ARE KNOWN TO ALL BUT NO ONE WANTS TO TAKE THE INITIATIVES
SHABBIR H. KAZMI
Sep 21 - Oct 04, 2009
Over the last couple of years duration of electricity load shedding has broken almost all the previous records. Ministers belonging to ruling coalition hold the previous government responsible for all the ills but could not provide any pleasurable reasons for decline in power generation, increase in transmission and distribution losses, and hike in electricity tariff despite fall in crude oil prices from their peak of US$147 to less than $70 per barrel.
On top of this, highly politicized statements by the concerned ministries and completely misleading rhetoric by the high ups of PEPCO suggest sheer apathy to public woes.
If one tries to explore the history of last two decades, it is evident that new capacities were not added to meet the growing demand. On top of this massive theft of electricity and mounting receivables did not allow the electric utilities to revamp their transmission and distribution (T&D) network.
Added to this are persistent hike in electricity tariffs which proliferate electricity theft. Efforts were made to cover up the theft under T&D losses hovering around 40%. There is no doubt that if 40% of total generation goes towards theft no company can avoid bankruptcy.
It is on record that the total numbers of units billed by the KESC are often less than its own generation and whatever it buys from WAPDA and IPPs losses to theft. This does not mean that performance of DISCOs operating under PEPCO is better. One could always raise finger towards KESC because the information is made public through its annual accounts, whereas PEPCO has no such tradition.
Even during the days when Power Wing of WAPDA was responsible its annual accounts were never prepared in time or made public.
No one should have any doubt that providing uninterrupted supply of electricity at affordable cost is the responsibility of the government. Be it PEPCO or KESC the government is still the biggest equity holder. It must also be kept in mind that IPPs were created to lessen the government burden but have contributed only to the hike in tariff. This statement in no way frees the electric utilities from their complete mismanagement and gross corruption. Electricity tariff is fixed keeping in view the bulk power purchase agreements with the IPPs.
Total generation capacity in the country (including IPPs and KESC) is around 20,000 MW. Out of this 6,500MW is hydel and13,500MW thermal. During winter electricity demand reduces to around 10,000MW or half of the installed capacity, therefore there is no justification for the load shedding. The extensive load shedding creates doubts about installed capacity as well as consumption. There could be two possibilities either the installed capacity is overstated or consumption understated.
Keeping in view the life span of hydropower plants and seasonal variation and gradual reduction in dependable capacity of thermal power plants, the capacity seems to be more than actual demand. Therefore, one could only say that demand figures are grossly understated, mainly because of theft.
Some of the analysts say that the recent fall in electricity generation was partly due to inefficiency of power plants but mainly due to interruption in fuel supply to the thermal power plants. This argument carries weight because HUBCO and KAPCO were forced to keep lower fuel inventories due to delay in payment by PEPCO. The condition was worse at GENCOs owned by PEPCO and KESC as they resorted to partly closure of their thermal power plants due to cash crunch.
It is on record that circular debt crossed Rs200 billion mark in the recent past. While effort was made to lessen the burden through issue of TFCs amounting to Rs 180 billion, the outstanding amount still touches Rs50 billion. TFCs carry an interest rate and the burden will ultimately go to the consumers. It is also on record that interest is also paid to the IPPs for the overdue amounts.
One should not have any doubt that the current spell of load shedding stretching from 8 to 16 hours is only due to gross mismanagement. Duration of load shedding could be reduced to couple of hours partly by improving efficiency of the power plants and partly by curbing electricity use. Advancing of clock was an attempt to curb use of electricity but the decision completely failed in achieving the desired objective and somehow the other Pakistanis suffer from the habit of wasting energy resources be it electricity or natural gas.
Experimentalists found independent power producers (IPPs) a solution to overcome limited electricity supply in nineties. Alter egos believe rental power plants (RPPs) provide solution today. However, many sector experts are of the view that unless T&D losses are reduced to less than 10% from current level of 40% even if generation is doubled financial health of the distribution companies cannot be improved. Cash crunch (mainly due to huge receivables) has also given birth to circular debt issue.
Some of the experts say that distribution companies need millions of rupees to revamp and expand their T&D network. Since the state owned companies do not have resources to do this there are two alternatives either the federal government injects liquidity in these companies or privatize them. The opponents of privatization say 'the condition of privatized KESC is worse than when it was working under state control' therefore the government should not sell electric utilities to the private sector.
However, it must be remembered that poor financial condition of KESC is due to rampant theft which cannot be contained without the help of the government. Some of the ethnic concentrations are notorious for theft and KESC cannot remove the kundas without the help of law enforcing agencies. If the law enforcing agencies are helpless one should not expect the KESC staff to endanger their lives.
MARRIOTT ISLAMABAD WAS ROCKED ON SEPT 20, 2008
Exactly one year has elapsed when the Islamabad Marriott witnessed the most unpleasant event on 20th September, 2008. Despite the tragedy which resulted in great loss, the hotel was resuscitated to the summit within three months. Mr. Saddaruddin Hashwani, Chairman, Hashoo group, proved by example that life's possibilities shrink and expand in proportion to one's courage. He personified the wisdom that great people emerge in the times of turbulence. He was determined to transform the wishes of the well-wishers into purpose and for that matter geared his team to achieve it. Today, the Islamabad Marriott Hotel stands tall and proud, refurbished and is serving its guests with the same hospitality and excellence.
The Hashoo Foundation while dedicating the day to the innocent victims of the incident, has reiterated its resolve and zeal towards the bereaved families. It bears remembrance that in response to the Marriott's tragedy of 20th September, 2008, , Sarah Hashwani, Chairperson of Hashoo Foundation had launched "The Sahara Fund" and the Relief and Rehabilitation Committee on September 24, 2008 so as to provide immediate financial support to the affected families. In addition to providing medical care for the injured, the Sahara Fund sponsored programs to help the families of the victims with their children's education, medical needs and skills training and employment until they become self-sufficient. Each family's situation has been assessed so as to aid them in achieving the same income level they had prior to the explosion. The Social Welfare Department of Hashoo Foundation (HF) developed specific policies and strategies for recipients of impacted families who received benefits disbursed from the Sahara Fund. The recipients have been categorized by distinct groupings and benefits disbursed based on:
• Assessed needs, based on number of dependents and level of poverty, following individual interviews with the person and/or family members; and
• After a medical appraisal undertaken by Hashoo Foundation medical staff
The recipients include not only injured and deceased of the Marriott but outsiders as well who fell prey to the explosion. They are receiving the monthly assistance through Sahara Fund at their doorstep and without any delay.