The Ministry of Water and Power on Sunday 29th June announced that the government would increase the subsidy for electricity so that the Muslims can have electricity during sahoor, iftaar and tarawih. The root cause of power shortage in the country is the privatisation of power generation and distribution. This privatisation means that private owners, who have limited resources, only provide electricity when they can profit. The severe power shortages occur because the private owners cannot provide electricity as a service and a right for all citizens, for that is the job of a responsible and caring state. So, private owners reduce power generation to prevent falling into loss through debts owed to them. Or they reduce generation to only the more efficient power plants because they give a better profit, keeping less efficient power plants idle.
So, even though Pakistan has over 20,000 MW installed capacity against a peak demand of 17,500 MW, less than half of that is produced, causing huge power shortages, 12 hours a day or even more, with people unable to cool themselves even by means of a fan in the scorching summer heat. And that is asides from these highly disruptive power shortages destroying local industry. Moreover, as part of privatisation, the regime has already guaranteed profits on investment for private owners of power, by increasing the electricity charges manifold. It has also made sure that the private owners are paid from the revenues of the state, even when they are not generating electricity because of fuel shortages.
Electricity has become so expensive that there is now a huge circular debt owed to the private owners of power. Last summer, in July 2013, the regime paid Rs270 billion to the private power producers, the IPPs. This enormous amount also alerts the people to just how much wealth there is in power, which they will not see a single rupee of. And this Ramazan the debt has mounted yet again.
The argument that the government is a poor manager and cannot run corporations profitably is a flawed argument. The provision of power is a public service and not a business. And the incompetence of the government is no argument for outsourcing a public service to private businesses.
MOEZ MOBEEN
Islamabad