This is apropos two back-to-back letters by this writer to Editor titled ‘Overcapacity dilemma: mismanagement or misjudgment?’ carried by the newspaper yesterday and Wednesday. Having said all this in my two previous letters to the Editor, a billion-dollar question remained unanswered: Why did Pakistan’s policy makers choose to install IPPs with double the capacity needed, while developed countries like the USA, Germany, and China maintain only a 20% reserve capacity.
This decision appears to stem from a short-sighted vision, plagued by sluggish and inefficient decision-making processes. Furthermore, inherent dishonesty and vested interests have often placed personal gains over national interests, leading to decisions that prioritize immediate benefits rather than long-term sustainability for the country.
It is high time that our political leadership clearly distinguish those power plants which are producing almost negligible electricity but enjoying the payment based upon capacity and those who are producing electricity as par with their capacity payment.
This is high time that our analysts, anchorpersons and civil society should change gear and be thankful to IPPs. We should admit our own mistakes and hold all those accountable who took imprudent decisions. Instead of advocating breaching agreements and pursuing legal action against IPPs, they should urge the government to engage with them respectfully, acknowledging their role in alleviating energy crises.
Moreover, the government should take decisive action to mitigate circular debt in the energy sector. Pakistan should introduce a performance-based payment system, prioritizing performance based payment systems. Besides, revising tariff structures to reflect the true cost of electricity, investing in energy efficiency through grid modernization, and enhancing governance to prevent corruption and mismanagement are crucial steps. These measures would reduce financial leakages and ensure a more sustainable and efficient energy sector.
Qamar Bashir
Copyright Business Recorder, 2024