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Unravelling Energy Scams

Unravelling Energy Scams

The government has come under fire once again over corruption charges in the Energy sector. It has been learnt that the government is creating artificial shortage of electricity to justify the import of LNG and installation of new power projects in the country. This is a charge that the government is denying, maintaining that only those power plants have been shut down which produce costly electricity while some others were closed for maintenance or shortage of fuel. However, a top official in the Ministry of Water and Power, who wished to remain anonymous, insisted that this is completely false, adding that around 2000MW plants have been closed on pretext of the cost factor.

It has come to light that many plants have generated no electricity at all in the month of September, while many others across the country have been producing much less electricity than their installed capacity. Pakistan has a total installed capacity of over 21000MW, which is more than its peak demand, but the country continues to face at least 5 hours of load shedding in urban areas and up to 8 hours of outages even in off-peak season, apart from the unexpected blackouts. It does not add up.

The foundation of Pakistan’s heavy reliance on expensive imported furnace oil lies in the Private Power Policy of 1994, which still exists today. This policy was probably the most crippling economic decision taken in the last 30 years by any government and has cost the country over $2 billion per year since 2006. This policy has given birth to the circular debt and never ending energy crises. The Nawaz government instead of trying to come up with a coherent energy policy, has tried to resolve the situation by either throwing money at it, as in the case of the 400MW Chinese Nandipur unit completed at a cost of US$ 840million, or by importing expensive LNG which is said to be a mega-corruption scandal and nothing more.

With the LNG project to become the scrutiny of the NAB shorty after Eid, shutting down the power stations to create load shedding could be way to justify the import of this costly fuel. Nandipur and Quaid-e-Azam solar park are two of the new initiatives that have earned charges of corruption, poor planning and ill execution as well.

What remains to be seen is how the government will defend these projects and accusations in the face of searing pressure from other political parties as well as the media. The true test lies with the effectiveness of the NAB of getting to the root of the matter in a fair and justified manner. However, if the past is anything to go by, the PML-N will continue on with its mega projects, bleeding the national exchequer dry, while power cuts will remain.

Source: http://nation.com.pk/editorials/24-Sep-2015/unravelling-energy-scams

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