Don’t like loadshedding, get used to it!

Bureaucratic Nightmare: 6 ministries and 42 agencies involved in energy policy-making

Six days before the much touted historic elections, I took a cab from sector F11 in Islamabad to go see a friend in F6. My driver Zaman, a middle-aged man from Mardan, had been driving a cab in the capital for the past 19 years. The cab was in shambles, creaking, squealing, screaming every time he tried to push the speedometer anything past 40. It seemed held together by duct tape and sheer willpower.

Small talk ensued. He spoke of his life in the federal capital, living markedly below the poverty line (which in of itself is a joke, but that is a tangent for another time). He had, surprisingly, only two kids, because he felt he could barely feed and educate one. I asked who he would vote for. He said he his vote was registered in Mardan. He needed to work close to 16 hours a day just to make ends meet, then go home to no electricity, no running water, and minimal rations. Then the cycle started again. He simply could not afford to go back home and vote.

Then he asked me which party should he vote for, one that could eliminate load-shedding from the country. He ironed his clothes between 2 am and 3 am, charged his phone intermittently throughout the night whenever electricity was available, listened to the radio between 7 am and 8 am, and his wife made sure the children finished their homework in the daylight hours. He said, if there was a party that could eliminate the blight of load-shedding from the country in the next few years it would be voted into power for the next several decades.

Load-shedding. The bane of the Pakistani existence. A scourge that has multiplied, like an unchecked virus, ravaging the lives and livelihoods of millions, shutting down industries, plunging the country, literally into darkness. It has even birthed new business models specifically designed to combat the shortfall. Five years of keeping Bhutto alive has netted us an average shortfall of 3,900 MW, severe load-shedding in urban areas and a much more pronounced problem in the rural regions.

The energy policy presented on April 22, 2010 by former Prime Minister Yousaf Raza Gillani showed a lack of long-term planning, instead choosing to treat symptoms. Two day weekends, a ban on neon lights and decorative lights, shutting down tube wells between 7 pm and 11 pm, turning on air conditioning after 11 pm, were all a part of this energy policy. The former federal minister for water and power Raja Pervaiz Ashraf insisted that the power crisis would be solved by December 31, 2009, and regurgitated the magical date ad nauseum until December 30, 2009, a day prior to the deadline, finally announcing that he had been wrong all along.

The power crisis has only worsened since. Last week alone, seven, well over half, of our thermal power plants were shut down because of the circular debt crisis. This debt, currently over Rs502 billion, is the greatest challenge for the new government, the first assembly session of which is today. Nawaz Sharif, for all his promises of metro buses, and massive motorways, is faced with a very unenviable and grave problem, one that is compounded by several intersecting factors.

First, the circular debt is the proverbial bull in this china shop. After the economic growth in the 1980s, energy demand soared. The government pledged to compensate energy companies with subsidies in the face of high operational costs, instead of allowing them to increase prices. However, these subsidies then went unpaid. The power companies borrowed from the banks to make the payments. When the energy companies were unable to pay the fuel suppliers, this curtailed or halted the fuel supply. This debt, snowballing down the chain, now stands over half a trillion rupees. Bear in mind that during the caretaker government’s tenure, the finance ministry could barely come up with Rs10 billion to help alleviate some of the energy crisis, and that barely dented the overall situation.

Second, there is the bureaucratic red tape. The energy policy itself, ill-planned as it may be, is also at the mercy of competing bureaucratic interests. As an example, six separate ministries, and forty-two agencies are involved in Pakistan’s energy policymaking, according to a report by Elizabeth Mills for the United States Institute of Peace. Whether it is reforms, such as privatization or attracting investment from the private sector, or international parties, or exploring gas and coal reserves on Pakistani soil, the bureaucratic quagmire has a habit of sucking the life out of even the most promising ventures. For Punjab, in May 2012, Khawaja Asif filed a petition in the Supreme Court against non-clearance of machinery for two power projects from the ports of Karachi. Despite the formation of a committee, a 94-page report finding the law minister under Babar Awan guilty for not providing the necessary clearances, the case is still pending in the Supreme Court. In Sindh, Chief Minister Qaim Ali Shah inaugurated the Thar Coal mining and power project on March 14, 2013, estimated to cost $1.35 billion, and produce 300MW. In the KPK, former Chief Minister Ameer Haider Khan Hoti inaugurated the 69 MW Lawi Hydro Power Project on June 30, 2012. Whereas in Baluchistan, a lot of emphasis was given to solar power projects, but no initiatives have yet been taken.

Finally, there is the issue of line losses and rampant theft. In the Senate’s 91st session report, theft alone accounted for Rs90.5 billion in losses to power companies. Interestingly, the amount of defaulter bills is almost exactly the same amount as the circular debt, last estimated to be around Rs495 billion, Rs7 billion of which is owed by the federal government. The average yearly loss is estimated at 2,600 MW, which, if curtailed, could compensate for a massive chunk of the energy shortfall.

It is a mess unlike any other, with many moving parts, and solving it will be a gargantuan task, one that will take the deepest reservoirs of patience, both from the government and the public in general. The PML-N, according to their pre-election manifesto, intends to create a new ministry of energy and natural resources through the merger of the ministries of water, power, petroleum and natural resources, introduce reforms for National Electric Power Regulatory Authority (NEPRA), Distribution companies (DISCOs) and Generating Companies (GENCOs), Oil and Gas Regulatory Authority (OGRA), permanent elimination of the circular debt, and development of alternate renewable energy sources. It all sounds very nice and snazzy on paper, but as may be evident, the solution is not as simple as the wave of some magic wand, nor will it bear fruit for several years to come. These are major policy changes, and major cultural mindset changes, and such sweeping changes cannot be inculcated into the existing system overnight.

For now, if you do not like load-shedding, you had better just get used to it!

The writer is the Executive Producer for Planning and Research at Capital TV. He can be reached at @zeesalahuddin on Twitter or [email protected].