Siemens Pakistan Managing Director and CEO, and member of the Pakistan Business Council (PBC) Sohail Wajahat H Siddiqui casts a light on the energy crisis and how his firm aims to power that light in an exclusive interview with Profit.
Pretty hands-on: Sohail Siddiqui comes across as the kind of hands-on executive who likes to get straight to the point. He began by revealing that his firm has submitted a viable energy plan to the government through the PBC which could potentially address the crippling power crisis. However, it was stressed that implementation is the basic issue in government policies, which often results in lasting problems for both the people and the government. So it is the high time for the business community to come forward and help the government in making good policies that are urgently needed for the masses, he added. It was noted that the community should play a broader role in the economic development of the country as well as its institutions, since everybody has a role to play in facilitating the path to a more accommodative economic environment.
Scratch my back: In return, though, he demanded incentives against taxation, reasoning that for governments to justify taxes, they must be able to guarantee citizens’ basic rights. While giving an insight into the nature of the energy crisis, he said that the prolonged hours of unscheduled load shedding can be brought to an end with just a small investment of $1.5 billion. Currently, the country is facing a shortfall of about 4,000 MW in electricity production, but this can be overcome by this relatively small investment. He informed that the PBC is a body of the elite business groups in the country. These groups constantly interact with government officials, including the president and the prime minister, to find out ways and means to overcome the energy and economic crises and to put the economy on the path of stability. Siddiqui said that under the short-term strategy, the shortfall in production and demand could begin to be bridged.
The long and short of it: The energy plan he has submitted to the government covers both the long and short term aspects to overcome the energy crisis, as under the short-term strategy the upgradation and overhaul of existing power plants would be sufficient to enhance output of electricity by 4,000MW. While for the long-term plan, it has been proposed that the government should focus on the generation of electricity from wind, solar, hydroelectric and gas. Power generation from the wind and solar technology is expensive, but this technology is essential to develop a viable energy mix, he said, adding that if the crude oil prices shoot to above $200 to $250 a barrel in the future, the economy will be unable to contain this crisis; in this situation, alternative energy resources will prove useful to generate low-cost electricity.
Neglect begets crisis: Siddiqui said that the government should make serious efforts to develop the energy sector, which has been neglected in the past while creating an unprecedented energy crisis in the country.
Had the previous governments developed large-scale dams and established new power plants in the past to meet the country’s growing demand, the country would not have been facing this crisis now, he argued. He also underscored that Pakistan is suffering a loss of about two percent of its GDP a year because of the energy crisis that triggers unemployment, affects industrial production, tax revenue collection and paralyses overall economic activity in the country. “Will is required to eliminate electricity shortage and to ensure smooth sailing of the ailing economy,” he said, adding that the PBC has decided to play a crucial role to support the government in overcoming major problems.
Wind in the sails: He also informed that five projects of Wind power, each with a generation capacity of 50MW, are underway and will be installed shortly and hopefully by the end of this year. These are approved projects and advisor to Prime Minister Dr Asim Hussain has been advised that these projects would take two years to achieve their maximum potential. It was acknowledged that these are time consuming projects, but there was a need for resolve to be displayed in tackling the power crisis. He reasoned that the tariff would remain be determined between the government and the companies, however the solar and wind power projects are usually expensive due to installation costs. He added that wind power generation is necessary despite it being relatively costly but will in the long term curtail the expensive oil import bill. For example, wind power generates only half of the power in comparison with furnace oil based power generation, that is why it is not usually found feasible, but its larger impact on the economy is favorable, he opined. All power companies in the country are prone to shortfall due to their hydel power generation issue, and it is creating two percent loss to total economy, he acknowledged. Therefore, he stressed that we should work in collaboration with all stakeholders to solve this energy crisis. He expressed concern that no new power generation project is in sight except Karachi Electric Supply Corporation’s planned 200 MWs project. In spite of this apparent inertia, the company has submitted four energy plans to the government for the future.
