Posts Tagged Poer Corruption

 

SUMMER in the plains of Pakistan is excruciating enough without the added joy of 20 hours of power cuts a day. Earlier this month protesters in several towns in Punjab, Pakistan’s wealthiest province, smashed windscreens, blocked motorways, shut down markets and set fire to the offices of parliamentarians and an electric utility. They clashed with police who brought out handcuffs and tear gas and fired live rounds in the air.

It was a reaction to electricity shortages that had plunged parts of the province into darkness and scorching heat. At one point the gap between supply and demand hit 7,500 megawatts (MW), or nearly 40% of national demand.  

Under the current government, the power sector has neared the top of a list of security, political and foreign-policy problems that includes some heavyweight contenders. Last week’s confluence of events once again underlined how easily Pakistan’s power sector can slip into collapse. The system’s many weaknesses find it all too easy to conspire. Cool weather in the north meant a reduced flow of hydroelectricity. Demand shot up as summer temperatures further south soared into the forties and air-conditioners strained to keep pace.

Meanwhile, several private power producers had to halt or slash production because the state-run power purchasing company hadn’t paid them. They had not been able, because the biggest consumers (especially provincial and federal governments) had not paid their own electricity bills. The bills that were paid are not enough to cover the cost of generation.

This so-called “circular debt”, currently about $880m, is an ongoing problem. The government usually bites the bullet, as it did this time, by paying off a portion when power producers are about to sue for default, enabling them to start generating again—for the moment. What remain unaddressed are the structural issues that cause the debt to pile up again: poor recovery of dues (receivables stand at $4 billion), electricity theft, transmission losses, reliance on imported oil and politically sensitive subsidies for certain groups. Perpetuating all of this is a lack of efficiency and co-ordination across a maze of state-owned agencies including a power purchaser, distribution and generation companies, a regulator and various ministries. The gap between the effective cost of generation and payments received is estimated at $12 billion over the past four years.

Riots over power shortages in Pakistan are not new. But this time the protests flared up against a unique political background: that of a prime minister’s conviction. On April 26th Yousaf Raza Gilani was declared guilty of contempt of court for refusing to re-open various corruption cases pending against Asif Ali Zardari, the president. In response, the Pakistan Muslim League-Nawaz (PML-N), the main opposition party, claimed the prime minister stood disqualified and started calling for his resignation in parliament and through public rallies.

For PML-N chief Nawaz Sharif, then, the power crisis could not have come at a better time. His party does run the Punjab government, but that has not stopped him trying to shift the blame onto the federal government. His parry is not merely rhetorical; Punjab relies on the centralised distribution of energy generated by resources in other provinces. Mr Sharif’s brother, the chief minister of Punjab, joined the power protests in Lahore.

At stake is more than just the fate of this particular government. If Mr Gilani makes it through the budget on June 1st and to elections next year, he will be the first elected prime minister to complete a five-year term. That would mark an historical achievement in the country’s constantly interrupted democracy.

But the disruption of lives and livelihoods may now have gone too far for the anger to confine itself to just one set of politicians. In the town of Vehari, rioters burned the offices of lawmakers belonging not only to a ruling coalition partner (which has threatened to quit the government over the issue), but also the PML-N and the Pakistan Tehreek-e-Insaf, the party of Imran Khan, who positions himself as the country’s only hope for change. Pakistan’s politicians might find they need to start addressing this issue, not just politicising it.

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