INTERVIEW WITH ZUBAIR TUFAIL, CEO TUFAIL CHEMICAL INDUSTRIES LTD.

KHALIL AHMED
(feedback@pgeconomist.com)
Nov 29 - Dec 5, 20
10

Mr. Zubair Tufail was born in Karachi in 1951. He graduated from Karachi University in 1971. He joined family business in 1971 and engaged in trading business of Chemicals & Plastics. He has traveled to more than 40 countries in Europe, America, Asia, and Australia mostly for business and as a member of government delegation to various countries.

When asked he said it was always our company's desire to enter into manufacturing business, which to be based on import substitution, to save foreign exchange of the country and generate jobs for the younger generation of Pakistan. To achieve this goal, first medium size chemical plant started production in 1995 near Lahore and second chemical plant commenced production in 2008 at Port Qasim, Karachi. Still the company has plans to set up more industries, which is on hold due to shortage of electricity.

PAGE: WHAT IS YOUR VIEW ABOUT ALTERNATIVE ENERGY INITIATIVES BY THE GOVERNMENT OF PAKISTAN?

ZUBAIR TUFAIL: Alternative energy idea developed in the world after rapid price increase of petroleum products in the world in last two decades, particularly sky-high price of $147/barrel of crude oil two years ago. Developed countries explored alternate sources of energy in the form of solar, wind etc, however studies indicate that initial cost of solar and wind energy is quite high and discourage the consumer for the same, although this energy source is much cleaner and environment friendly. Government is keen to develop alternative energy, but it has limited funds to support this great sector. It is guiding the private sector to take initiatives. Of course, government provided land to the private sector in recent years, particularly in the province of Sindh, which has big corridor for wind energy, however no significant progress was seen in last few years.

PAGE: WHAT STEPS HAVE BEEN TAKEN BY OUR NEIGHBORING COUNTRIES IN TERMS OF ALTERNATIVE ENERGY, WHICH WE SHOULD ALSO HAVE TAKEN LONG AGO?

ZUBAIR TUFAIL: In the neighboring countries like India and China considerable progress has been made to develop the wind energy. In fact, both countries are potential manufacturers of equipment required for turbines etc. In India, sizeable amount of electricity is produced by wind energy in the provinces of coastal areas which are natural corridor of wind. Similarly, in China, province of Xinjang (Urumqi) and few other provinces are already producing energy through wind source. Chinese companies are also fast developing the solar energy, but current cost of equipment (panels etc.) is high and does not encourage users to opt for it. However it is announced in different seminars that soon prices of solar energy equipment will be reduced substantially (less then 50 percent).

PAGE: WHAT IS YOUR OPINION ABOUT COST EFFECTIVENESS WHEN WE TALK ABOUT ALTERNATIVE ENERGY IN PAKISTAN?

ZUBAIR TUFAIL: As to cost effectiveness of alternate energy in Pakistan, so far no encouraging news are there for Solar energy, but it appears that wind energy will provide small quantity of electricity to the national grid or the local areas. As solar & wind energy yet to establish in the developed countries, therefore it appears that it may take several more years in Pakistan. Possible way of developing wind energy is to have joint venture with foreign companies, who can assist Pakistan to assemble/manufacture turbines locally as the cost of imported equipment is very high, but we have the potential of resourceful wind corridor especially in the coastal areas of Sindh.

PAGE: YOUR VIEWS ABOUT WIND POWER POTENTIAL IN PAKISTAN.

ZUBAIR TUFAIL: We have good possibility to develop wind power in Pakistan and if turbines are produced in Pakistan with foreign technology, small & medium size companies can be established to supply 25, 50 and up to 100 MW based on wind energy.

As per the map of wind corridor developed by international agencies, coastal areas of Sindh has most potential, followed by some areas in Balochistan and Punjab. As per feasibility studies minimum 1000 acres of land is required to install equipment to produce 50 MW of electricity.

PAGE: WHAT YOUR COMPANY HAS DONE TO PROMOTE ALTERNATIVE ENERGY IN PAKISTAN?

ZUBAIR TUFAIL: Our company, Planet Energy (Pvt) Ltd., contacted potential equipment suppliers in China and Europe during last 2-years and with support of Government of Sindh, which is in the process of allocating suitable land, we expect to start work on ground in year 2011 and project will be completed in 2-years. Foreign experts will be invited to erect the equipment as per international standards whereas financial matters will be completed during 2011.

PAGE: WHAT INCENTIVES DO YOU NEED FROM THE GOVERNMENT OF PAKISTAN?

ZUBAIR TUFAIL: We expect from the government to provide transmission line from the wind energy producing companies to the main grid, before the startup of electricity production and to allocate the land only to such companies, which are capable to complete such projects in agreed time. Land allocated in last 10-years to private sector and no progress was made, should be appropriated and given to genuine local or foreign companies, which give undertaking to complete the project in agreed time. Purchase price of wind energy may be announced in advance for the next 5-years.

PAGE: HOW CAN PAKISTAN OVERCOME ENERGY PARTICULARLY ELECTRICITY SHORTFALL IN THE DECADES TO COME?

ZUBAIR TUFAIL: Present electricity shortfall of about 5000 MW crushed our economy, several factories were closed, thousands of workers are jobless and cost of our products rising day by day. Not only industries, but life of common person is very much affected due to continuous load shedding, houses are without electricity. This situation has made big population a patient of high blood pressure and peoples are loosing their patience. If the government does not take suitable steps to overcome the electricity shortage, no government will be able to stay in power for long time. Only long-term solution is to produce electricity through hydel sources, coal and import of gas from neighboring countries.

Water Dams: Government has studies of several dams. Works on Kalabagh Dam and on these dams should be started on high priority with the help of international agencies, as this the cheapest source of electricity for decades. If work on any dam starts in 2011 with availability of funds, it will take at least 7-8 years to complete. But, Pakistan has the potential to produce more than 30,000 megawatts from such dams in next 15-years.

Coal Energy: Sindh has one of the largest coal reserves in the world and it can generate sufficient electricity to overcome the current shortfall and it can supply the required electricity to the national grid within 5-years after startup of such projects. It appears that government of Sindh already given support letters to some companies, who are likely to start production up to 2000 MW till 2014-15 based on Lakhra coal.

Imported Gas: Pakistan and Iran already made initial agreement to develop gas pipeline from Iran to Pakistan with the cost of US$7 billion approximately. If work on this pipeline starts in 2011, it can be completed by 2014-15 and it appears to be achievable source of energy supply to overcome our industrial and domestic shortages. It will also help the country to increase the industrial production and create new jobs. Other countries like Turkmenistan and Qatar are also interested to develop the gas pipeline or LNG facilities in Karachi.

Finally, I would like to add that for the economic stability of the country, as well as the progress of Pakistan, it is very essential that government should take concrete steps to overcome the shortage of energy in the country with the help of international agencies or friendly countries.