With any international deal signed by our government come a host of problems and insecurities. In Pakistan, nothing is simple, whether it is Chinese dollars or American aid. The problem boils down to bad governance, nothing else.
Iran, after relief from sanctions that targeted its energy sector, is the newest seller to Pakistan. It is expected that woeful energy sector governance, with risks including rampant theft, poor maintenance, and transmission and distribution losses of around 20 percent, will slaughter the benefits from gas supplied from Iran. LNG imported from Qatar was also hailed as a great idea, but then there were a myriad of associated administrative and management problems; from Qatar refusing to send us its container, issue of price regulation and the final demise of the Oil and Gas Regulatory Authority (OGRA).
Even if the pipeline is completed in Pakistan, national distribution networks probably won’t be able to handle the additional volumes of natural gas coming from Iran. Last year Pakistan moved away from the Iranian gas pipeline project, saying it was unable to generate revenue needed for the development of the project because of sanctions. Its completion can fill some gaps in the Pakistani energy sector because Iranian natural gas could be significantly less expensive than LNG imports. But do Shahid Khaqan Abassi, and his team at the Ministry of Petroleum have plans to improve distribution and set and regulate prices? LNG is coming from Qatar, gas from Iran, China is building power plants, and over the last year oil prices have fallen thanks to the shale oil boom in the US. What have we achieved from all this? Fewer power outages? Lower petrol and gas prices?
Every few days, there are reports in the papers of IMF funds being released or the Asian Development Bank pledging money. The ADB in February said it was supporting efforts to help Pakistan build its first liquefied natural gas terminal with a $30 million loan. With the LNG facility, the bank said the Pakistan government would save about $1 billion per year on its fuel import bills. But how much will we have to pay back in debt?
Power supply has been short for decades, and aid and loans from international institutions have also been coming in for decades. We are still operating only at subsistence levels. When will we see any real results?