Government fails to push through poorly crafted energy policy: task force formed

Attention: open in a new window. PDFPrintE-mail

The government has been unable to push through the energy policy from the Council of Common Interests (CCI) after the provinces expressed their reservations and sought time to review the proposed amendments needed for the implementation of the policy, said sources privy to the meeting.

Sources further revealed that the provinces also did not respond positively to the federal government''s exhortation to generate a budget surplus, one of the prior actions of the International Monetary Fund (IMF) for a new programme. The provinces argued that they were not receiving their share from the divisible pool on time which was creating fiscal problems for them and delaying implementation of projects and therefore they could not give any commitment. An official said that the discussion focused only on the provinces generating a budget surplus and the federal government did not share terms of prior conditions of the $5.3 billion Extended Fund Facility (EFF) loan from the IMF.

He told Business Recorder that the federal government stated that when the agreement with the IMF is finalised only then would its details be shared with the Council and the Parliament. The provinces also reportedly opposed the imposition of new taxes and underlined the need for effective compliance by the tax machinery of taxes already imposed.

The official added that another meeting of the CCI would be convened in a week or two to consider the recommendations of the committee constituted by the Prime Minister with the Chief Secretaries of all four provinces and their technical experts, representatives from ministries of Finance, Law and Justice, Water and Power, Petroleum and Natural Resources also in attendance. The committee would brief the provincial teams'' on the proposed amendments needed for National Power Policy and would try to remove the concerns of the provinces within one week and incorporate recommendations by the provinces, if appropriate, in the policy before approval and implementation.

Sources said that the meetings of the committee would start from Monday 29 July onward to finalise the recommendations for submission to the CCI for approval. Meanwhile, a statement issued by the Prime Minister Secretariat stated that the Prime Minister Nawaz Sharif while addressing the 23rd meeting of Council of Common Interest (CCI) in Islamabad said that power scarcity is a major problem being faced by the country and concerted efforts are needed to resolve the issue. He said that the power issue needs a policy which encompasses all dimensions and it also needs a strong will by the Federal Government as well as the federating units to make it successful. "Provinces'' role is crucial in making the policy a success," he added.

The Prime Minister said major problems being faced by the Power Sector are demand-supply gap, lack of affordability, inefficiency, and pilferage and power theft. He stated that major changes will be brought in the system to overcome these issues. Pakistan is producing 45% of electricity with furnace oil which is too expensive / costly for power generation and has led to higher tariffs while distribution losses which account for 25-28% and theft of electricity amounting to Rs 140 billion per annum are major causes of the shortfall", the Prime Minister said. Nawaz Sharif said that the government plans to end load shedding within the next 3-4 years through a multi pronged strategy. The strategy includes production of low cost energy, tariff restructuring, efficient technology transparency and merit based system. Low cost energy will be produced by using coal and hydel resources for power generation. The extraction of coal and development of the infrastructure for power production will be carried out simultaneously to save time. Till such time that the local coal is available, it will be imported for power consumption, added Prime Minister.

He said that run of the river projects are being initiated to overcome the short term demands while large dams including Bunji dam and Bhasha dam will be constructed over a period of time to overcome the irrigation needs as well as the power shortage. The Prime Minister said that the power strategy foresees bringing down the power tariff to a single digit in three years. The tariff restructuring is main feature of the new energy policy through which subsidies will be gradually rationalised. The 200 unit consumers will be targeted for subsidies.

Prime Minister added that mismanagement and inefficiency of WAPDA and other concerned departments is responsible for this situation. They have miserably failed to maintain system and today our distribution lines cannot bear the burden. 1400 megawatts of electricity can be brought into the system, within one year, only through proper maintenance of the system, the PM added.

Nawaz Sharif stated that the government has to take lead in power projects implementation strategy. He announced construction of Gaddani Energy Corridor which will provide services to investors for energy production. It will be a hub of electricity generation, the Prime Minister added.

All Provincial Chief Ministers appreciated the energy policy presented by the government but requested the council for time to make a detailed analysis of the policy in order to further improve the policy. The Prime Minister directed to form a committee comprising Chief Secretaries of the four provinces and one nominee of each to submit their report within one week.

The Prime Minister said that the implementation of the policy would not be an individual effort but a collective endeavour to overcome the power shortage and in this regard the input of the provincial governments will be very important. He highlighted the role of the provinces in reducing the incidence of power theft and power pilferage, asked for their co-operation in bringing down this phenomenon and promised all assistance to the provinces. The meeting was attended by Shahbaz Sharif, CM Punjab, Qaim Ali Shah, CM Sindh, Pervaiz Khattak, CM KP, Dr Abdul Malik Baloch CM Balochistan, Federal Ministers Khwaja Asif, Ishaq Dar, Riaz Hussain Pirzada, Shahid Khaqan Abbasi, Ahsan Iqbal, Pir Syed Sadaruddin Rashidi, Lieutenant General Abdul Qadir Baloch (Retd) and others.

Courtesy: BR

Forex open Market rates & comments Archive

Login Form