What was the best excuse given by the incumbent government on the persistent energy shortage as “they (Musharraf regime) did nothing”, will be soon used against it at every forum as the ruling party has failed to address the root cause of energy crisis, the circular debt, that has already started hampering new potential power projects in the country. An official source said that the government has been recently informed by the power sector investors that the banks were not interested to provide any financing for new power projects until the issue of circular debt was not resolved. The banks are already over exposed to the power sector and given the current precarious situation in which a few Independent Power Producers (IPP) have invoked the sovereign guarantees for the third time within a year. The low credibility of the government and its failure to resolve the circular debt have forced the investors to back track as they do not want their receivables and payment struck. The source said the refusal by the local banks would be affecting the progress of new power projects in the alternate energy category in which the government has set a target of 1000 MW before the end of the current year while the Thar coal based projects would not be started. He said the government would be blamed by all for doing nothing in the last four years to develop any hydro, wind or other alternate mode of energy for the country. Even though China and Japan have shown interest to finance the much required infrastructure in the Thar areas, the lack of seriousness of the federal and provincial government of Sindh has played a major role in no progress of any power project. A study conducted by the Pakistan Business Council estimates that the petroleum import bill would be reaching over $ 120 billion by 2020 if measures to promote alternate modes of power were not introduced in the country. Pakistan’s current energy requirement of 14000 MW is estimated to rise to 26,000 MW by 2020. For energy security of the country, experters are stressing utilizing vast untapped potential of hydel and coal. The source said that a joint public private partnership project the Sindh Engro Coal Mining Company has completed its technical and bankable feasibility study for 1200 MW power plant, which requires an investment of $ 3 billion. He said that without the resolution of the chronic problem of circular debt the banks were not likely to finance the project of utilization of the indigenous coal. Other majors reasons for the slow pace on the Thar coal front remains the absence of the feed-in tariff for the projects. The Minister for Water and Power has claimed many times that it would be announced soon but the matter still remains unresolved. Then there has been no development on the infrastructure front even though the PPP government is claiming from 2008 Thar coal as a panacea for the energy crisis.
