IPP lobbyists making hey while sun shines on Capital Hills

·         Monday, 24 June 2013 00:00

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Saeed Minhas

Islamabad: The government of Pakistan Muslim League-Nawaz has finally played the much-awaited reverse sweep to open its account of point scoring with the leading institutions of the country by announcing to bring high treason charges against a caged former dictator Musharraf.
Months of deliberations and speculations seem to have come to an end and finally a Pandora’s box is likely to open which will make not only Khakis but even black robes to look into the mirror. Besides accepting their follies of the past, they might be asked to furnish apologies; at least that’s what many leaders within Muslim League Nawaz are expecting with a bit of worry and concern in their voices.
But buried under this big news of the day was the highlight of the proceedings of National Assembly; pushing for the payments to the oil barons. The movers and shakers of country’s economic fortune successfully lobbied to bring in a call attention notice on the agenda asking the federal government to retire the circular debt with a view to improve the crippling electricity outages in the country. Finance minister has already announced to pay these companies without even settling any outstanding issues with them, some of them like heat rate settlement are even in the courts, by paying them almost half of their demanded Rs 520 billion within next three months. Will that improve the loadshedding in the country? Many industry experts believe that it might help lessen the shedding but not completely get rid of it.
Though lobbying is not yet official in the power corridors but like many other sins this one is paying off for the IPP moguls, oil barons and all those who have a direct stake in the repayment of circular debt. At least some babus in finance division have shown us the documents which prove that their lobbying efforts have materialized and payments are about to be made in lieu of giving some extra relief in loadshedding to Lahorites and posh Isloo sectors if nothing else.
The reasons they cite are that Pakistan is crippled for almost past seven years with a constantly increasing shortfall of over 6000 MW, especially in the peak demand seasons of summer and winter. Water and Power Development Authority (WAPDA), Karachi Electricity Supply Company (KESC) and the Pakistan Atomic Energy Commission (PAEC) are the main producers of electricity. Electricity generation in Pakistan is a mix of hydel (31%), thermal (66.8%), and nuclear power plants (2.2%).
Rampant corruption (40 %), nepotism (99 %), technical losses (35 %) and infrastructural crumbling has forced the successive governments since first term of Benazir Bhutto to look for alternative ways to bridge the gap between demand and supply instead of correcting these white elephants. Despite all sorts of fishy stories about successive regimes and lots of court rulings, the fact remains that since 1994 till to-date 13 Independent Power Producers (IPP’s) are supposed to contribute about 7000MW while half a dozen Rental Power plants (RPPs) were supposed to give some additional cushion to country’s demand of above 15000 MW.
Isn’t it ironic that none of this could be materialized; neither the public sector nor the private generation is producing at its full capacity? Yet the electricity bills have more than doubled in the past seven years and are sure to climb further up when new surcharges and adjustments will be added on almost monthly basis to the consumers’ bills.  
The figures of corruption and other losses quoted above are coming from auditor general’s books because hardly 25 per cent of the audit of Pakistan’s power generation sector reveals year after year misappropriation of over 40 to 60 per cent in almost every sphere of their functioning. But do not be surprised to learn that there has been no audit for IPPs or RPPs in the past five years or so, as minister after minister (Dr Asim after Dr Asim) have been blindly following their dictates. Still we are told that circular debt is climbing upwards from 500 billion rupees towards 600 billion rupees mark.  
Khawaja Asif, the new federal minister assigned the task to carry on this burden of taking the corruption and nepotism in this sector to new heights is trying nothing out of the box but toeing the line of those who actually were responsible for all this mess. It’s not the Manshas’, Musadaq Malik or bureaucracy but it has got to do more with a vision to come out of this miserable situation. Especially when the foreign direct investment has already fallen by more than 88 per cent since 2008 (from $ 5.8 billion to mere $ 760 million), any more stories of loot and plunder in the power sector is sure to sink the entire set up, reveals economists sitting on back benches of finance and petroleum ministry.
Many observers are questioning quite openly the commitments made by prime minister Nawaz Sharif on the floor of the House in which he categorically decried corruption, nepotism and vowed to uphold merit and fair-play. But how fair is this that the people trusted with making a new energy policy for the country and even the federal minister for water and power himself has a direct conflict of interest?