THE yawning gap between the power demand and supply makes localized power cuts and loadshedding a common feature of life in Pakistan. However, Pakistan experienced a rare incident of national power outage last week. The country’s power supply network collapsed after a major power plant developed a technical fault and led to massive outages. The incident refocused criticism toward the inability of the government to overcome an energy crisis that has crippled the economy and adversely impacted life of millions across the country. It also exposed the nation’s ramshackle infrastructure and challenges that lie ahead to counter the prevailing energy crisis.
Even though power to major cities of Islamabad, Lahore and Karachi was restored in a few hours, most of the rural areas continued to be affected by the blackout. On a national level, Pakistan generates an estimated 8,500 megawatts of electricity against a demand of 13,000 megawatts on a daily basis. The power deficit leads to long spells of loadshedding, forcing people to adapt their daily schedules accordingly.
Over the years, the infrastructure has crumbled due to underinvestment and mismanagement. As around 20 different provincial and federal bodies manage the power business in Pakistan, there is no coherent strategy and long-term planning in the energy sector.
Ziad Alahdad, a prominent economist, firmly believes that “integrated energy planning and policy formulation (IEP) and the restructuring of institutions are simple ideas that can pull the country out of the colossal ongoing energy problems”. With the tariffs being heavily subsidized for consumers, and distribution companies experiencing heavy line losses, the sector faces a financial pinch and requires government intervention to resume fuel supplies suspended due to non-payment of dues.
Energy hungry Asian economies are not new to power cuts as their power systems struggle to keep pace with the rapidly surging demand. Last year, India suffered the world's biggest-ever power outage as the transmission network failed and over 680 million people spent hours in darkness. Although there is no quick fix to address the complex energy shortage situation in Pakistan, energy analysts believe that immediate attention must be paid toward infrastructure-related inefficiencies. Just by reducing the power lost on the grid, power supply can be increased by around 15 percent to 40 percent. Analysts estimate that power shortages are costing the country a loss of three to four per cent of GDP and have led to widespread unemployment due to closure of industrial units. They fear that riots and public unrest to protest power shortages may get out of control in future. Such violent protests may threaten national stability and security.
Political analyst Hasan Askari opines, “If these people can challenge one government they can challenge any government. Violence and agitation become the normal political style and you never have stability.”
Pakistan needs to formulate a sound policy that tackles the root causes of energy shortage in Pakistan. The energy crisis can be overcome by addressing low utilization of existing resources, developing the optimum energy mix, circular debt and developing an appropriate pricing policy. Some other major political parties are also calling for the development of the vast Thar coal fields in Sindh.
Discovered about 22 years ago, these are the world’s sixth-largest coal deposits but have not been mined due to severe disagreements between the provincial and federal governments. Rental power projects, a short- term solution undertaken by the government, were marred with corruption scandals and failed to improve the worsening situation.
The government of Pakistan is determined to push ahead with the import of gas from Iran. A high-level delegation from Pakistan, led by President Asif Ali Zardari, will soon finalize the arrangements for a $ 500 million loan to build a gas pipeline that would connect Iran’s gas network to the Balochistan border.
Official estimates of Pakistan’s government point out that the gas supply would help in the generation of around 4,000 megawatts of electricity. Iran is also keen to partner with Pakistan for the construction of an oil refinery near the Gwadar port for the import of cut-price gas. Yet, some analysts remain skeptical about the timing of this much delayed project and view it as a stunt to boost ratings ahead of the elections.
However, the US is staunchly against any such deal between the two countries and has warned Pakistan of international sanctions in case the agreement is finalized. The US points out that any injection of foreign exchange reserves in the Iranian economy will be in violation of UN sanctions and may encourage the country’s ambitious nuclear program. Even though the US has expressed its willingness to aid Pakistan in overcoming the energy deficit, Pakistan cannot afford to lose more time.
As an alternative to the Iranian gas pipeline, the US favors the proposed Turkmenistan–Afghanistan–Pakistan–India Pipeline (TAPI) to enhance regional integration and energy sourcing. From Pakistan’s point of view, the Iran-Pakistan pipeline remains more commercially feasible and secure as the volatile security situation in Afghanistan will not disrupt gas supplies.
The prevailing energy crisis was a stern test for the country’s democratically elected government to show political maturity and seriousness in handling issues that affect the common man. With the government still unable to deal with the energy problem, chances are that this national issue may well seal the fate of Pakistan’s current political setup in the forthcoming general elections.
