A policy analyst and development practitioner, Dr Abid Qaiyum Suleri has
been serving as executive director of leading Pakistani think-tank
"Sustainable Development Policy Institute" since 2007. Besides some
policymaking at home, Dr Suleri has also served on various policy
formulating bodies in South Asia. He is a PhD in food security from
University of Greenwich, UK (2001).
These are extracts from BR Research's recent interaction with Dr
Suleri in Islamabad: BR Research: How do you view the government's
initial efforts at resolving energy sector woes? Abid Qaiyum Suleri: It
is understandable that power generation cannot be increased overnight,
but some immediate measure can be taken and some of them are reflected
in draft power policy. However, in order to implement any policy, there
are certain prerequisites, for instance, competent and apolitical people
should be appointed in Nepra and Ogra to transform them into true
independent regulatory authorities. Moreover, efficiency-based resource
allocations can be done in the energy sector by providing more furnace
oil or gas to those power plants that have higher efficiency. That may
not be easy, but the government would have to carry out a "heat rate"
audit of Independent Power Producers (IPPs) (which have an installed
capacity of 8,657MW) and try to divert the fuel to the more efficient
IPPs.
But inefficiency is just one of the many problems in the Gencos
(government-owned power-generation companies) which have an installed
capacity of 4,720MW. The furnace oil that Gencos receive from PSO
contains water content as high as eight percent, compared to the
permissible water content of 0.5 percent. Due to inefficiencies and
pilferages, Gencos eventually produce just one-third of the energy they
can produce with the same amount of fuel. There is pilferage on the way,
with connivance of officials. This, in our estimates, translates into a
whopping loss of about Rs 40 billion per annum. Genco's should refuse
such high water-content furnace oil, but they don't. This is a
governance issue which needs to be looked into.
Another governance failure rests with the distribution companies
(Discos). Some XENs in large cities are involved in 'selling'
loadshedding hours, which means they would take bribes to allow a
certain area or locality to receive more electricity than the others.
The electricity that NTDC allocates to a particular Disco is supposed to
be evenly distributed across rural and urban areas.
However, a rural area or a suburb may face the brunt of
loadshedding because some industrialist might approach the conniving
Disco staff and pay them off to avoid long loadshedding for his factory
production. It is true that current power crisis may not be resolved in
next 3-4 years; however, abovementioned governance issues may be fixed
in a fortnight by adhering to principles of transparency and
accountability. BRR: If improvement in power generation is a long
drawn-out process, can the situation be improved earlier on the
distribution side?
AQS: Discos must allocate loadshedding hours in areas with
respect to their distribution losses. They should make the relevant,
local level officials responsible for theft- and recovery-related
issues. Moreover, Discos should provide maximum electricity from where
there is maximum bills recovery - this has already been done by KESC in
Karachi. The government should also think about allowing Discos to
purchase power from any source they like, because doing that will break
the monopoly of Gencos and IPPs. In addition, we are recommending that
the government provide pre-paid meters to areas where bill default is
high.
What we at the SDPI are suggesting is that efficiency and
governance in the power sector be devolved to the local level. We are
also recommending that federal government allow a province, where a
Genco is located, to directly open the LC for import of furnace oil. But
decentralisation demands accountability, so the provinces should also
be made accountable in such a scenario.
BRR: What specifically is SDPI currently working on regarding energy sector?
AQS: We are working mostly on energy governance. Our position is
that complete removal of subsidies will mean lifeline users will be
worse off. Already, Pakistani consumer is paying an average tariff
higher than the consumer in India, Bangladesh and the United States.
Pakistan's average applied consumer tariff is Rs 12 per unit, compared
to Rs 7.36 in India, Rs 5.47 in Bangladesh and Rs 8.59 in the US.
Further raising the tariffs for the industrial sector, which is paying
tariffs that are among the highest in the world, is not the solution.
We believe that there should be a review of the policy for
tariff rationalisation. Tariff rationalisation, especially for
industrial sector, would reduce the incidence of power theft. We need to
learn from our region. For instance, in India, electricity is priced
cheaper for their agricultural users compared to other user categories.
Similarly, industrial users in Bangladesh get cheaper electricity
compared to residential users.
We are also currently studying the efficiency level of UPS
devices, to find out the amount of electricity they return compared to
what they absorbs. In an economic sense, we want to know how much
unproductive energy is being taken up by these devices from the overall
energy balance sheet.
We have a new report coming up on shale gas prospects in
Pakistan. Pakistan possesses shale gas reserves which are many times
more than the natural gas reserves. This new resource is a combined
resource of India and Pakistan as it is located on the border,
underneath successive layers of clay. Our report will argue for
exploring the feasibility of how to bring shale gas in our energy grid.
BRR: We have been hearing about shale gas for many years, yet there are no developments so far. Why is that so?
AQS: Firstly, the influence of oil lobby is a big hurdle.
Secondly, Pakistan does not have the requisite technology and capacity
to undertake this complex project. Thirdly, foreign investment scenario
is bleak. Fourthly, since most of shale reserves are on the border,
whichever of the two countries starts digging the ground first, the
other will raise hue and cry, similar to what we have seen on
cross-border dam constructions. Lastly, policy-level thinking,
unfortunately, is that the possibility of shale gas is hypothetical.
BRR: Coming to food security, what is the current situation in Pakistan?
AQS: SDPI is soon publishing its 2013 Food Security Report. We
have found that while food availability from major crops has remained at
the same level over previous year, its accessibility has decreased. At
the provincial level, efforts are geared towards enhancing production,
which is important. However, failure to link production with
accessibility remains a lingering issue, which leads to more food
insecurity. Unfortunately, the previous PPP government did not own the
Zero Hunger Programme that they themselves launched. Hopefully, this
government will prioritise this issue along with other pressing ones.
It must be understood that food insecurity is not about the
percentage of people who are sleeping hungry, due to the state's social
safety nets, philanthropic initiatives and other strong community
linkages, the extent of hunger gets slightly reduced. It is the people
in the lower middle class that are at the top rung of food insecurity.
These people cannot access the social safety nets (like BISP) because
they are not 'poor' in the strict sense. They also do not want to access
such safety nets due to social stigma. What happens is they start
compromising on their basic food requirements.
Dipping a loaf of bread in tea and eating it might satisfy
hunger but it doesn't provide balanced nutritious diet. That is
especially severe for kids up to five years of age whose IQ and physical
development are irreversibly affected due to malnutrition.
BRR: How alarming has the Water Security issue become?
AQS: When I advocate building dams and water reservoirs (which
is politically sensitive nowadays), I am talking from the water security
perspective. Pakistan's current per capita water availability is
already low, about 1,000 cubic feet. We are at the threshold of being
water scarce nation. Pakistan's population is going to double in next 30
years, which means per capita ratio would become at least half keeping
the water supply at same levels (which is unlikely).
If no action is taken, water insecurity will grow over the
years, and over time, water outages will become harder to withstand,
because unlike gas or electricity, water cannot be imported. The crisis
will be different, and severe, compared to the ongoing energy crisis,
for water is life.
We receive about 75 percent of annual precipitation in three
months' time. Due to lack of water reservoirs, much of this rain water
remains unutilised. Building dams is essential for storing this water
for household water supply, irrigation purposes, and for energy
generation, too. Starting point for the government would be to devise a
policy to at least maintain the per capita water availability based on
projections of population growth and water supply.
|
