ISLAMABAD: President Federation of Pakistan Chamber of Commerce and Industry (FPCCI) Mian Nasser Hyatt Maggo has urged the Prime Minister Imran Khan to address energy security and save Pakistan from economic collapse.
In a letter to Prime Minister he invited the PM’s attention towards the deteriorated state of electricity, for which his personal involvement is imperative.
President FPCCI has also shown concern at the dismal performance of Ministry of Energy and enormous allied entities including NEPRA that have remained unanswerable in their working without any improvement in political economy of electricity.
“The cart before the horse like 39,000MW installed generation capacity versus 23,000MWs evacuation of electricity through transmission and distribution is further added by more than about 18 percent losses that need to be corrected as a measure of the much trumpeted required reforms in the energy sector,” Maggo added.
According to the FPCCI, the serious issue of energy security is a sub-set of national security as Pakistan’s arch rival Indian Establishment has already declared that energy security is a vital constituency of national security.
FPCCI argued that power sector of Pakistan is a leaking bucket, the holes are deliberately crafted and leaks carefully collected as economic rents by various stakeholders that control the system.
“Our power sector is a bed of evil built by corruption, greed, in-efficiency and in-justice while the bills have continued to increase, it is time to plug the leaks,” he continued.
The circular debt has risen from Rs1.1 trillion in 2018 to Rs2.5 trillion – the main reason behind this escalating circular debt and hike in electricity tariff is due to expensive and excess power generation capacity. The previous regime added 25 percent more expensive electricity generation than comparable regional benchmark.
The contracts were structured to the detriment of economic competitiveness by signing contracts on “take or pay” basis that require to be re-negotiated in the public interest as the recently re-negotiated agreements with IPPs are still not considered criminal acts in developing agreements against the public interest.
The obligatory annual capacity charges were Rs185 billion (Rs2.1/unit) in 2013 which have increased to Rs860 billion in 2020 and are projected to increase to Rs1.455 trillion (Rs10.82/unit) in 2023.
Criminal neglect in policy planning and execution is evident in that the past regime did not invest in high voltage transmission and distribution system to vacate the available energy, where it is required, he further maintained.
The other issue, according to FPCCI, requiring correction is deliberate unused/under-unutilized operation of efficient power plants while preferring the use of highly in-efficient power plants that continue to be facilitated which is one of the reasons for the rising circular debt.
The President FPCCI said the Prime Minister had committed to revive the economy which is contingent upon reviving the energy sector. He invited attention to highly misplaced inter-connectivity in K-Electric system, which has lower losses based on available connectivity from national grid.
The President FPCCI said that two sets of selling cost of electricity through higher selling cost of electricity by K-Electric can be contained through reforms in the energy sector.
Copyright Business Recorder, 2022
Comments
Comments are closed.