Power shortage in Pakistan

By Muhammad Mehdi | Gwadar Pro Jun 27, 2022

Editor's note:  The article reflects the author's opinions and not necessarily the views of Gwadar Pro.

Pakistan is a large country in terms of area, resources and manpower. There is no shortage of manpower in Pakistan as well as skilled workers. But from misfortune and failure to resolve issues, the country is currently facing its worst energy crisis. Lack of electricity is not only eroding the productive capacity of the country but also disrupting urban life.

This situation is not limited to any one area of the country but from Karachi to Khyber, where the listeners are lamenting that due to the unavailability of electricity, the students' education is being severely hampered while the people involved in the business are suffering from severe distress. According to media reports, power outages sometimes last for eight to ten hours in urban areas and up to 16 hours in rural areas.

One of the reasons for this is the rise in the prices of coal, RLNG, and furnace oil, and also a series of wrong decisions.

At present, if shortfalls and line losses are combined, it reaches a total of about 7,000 megawatts.

The current weather in Pakistan requires about 25,000 to 29,000 megawatts of electricity, which fluctuates with changes in weather conditions. Pakistan's current power generation capacity is 36,000 MW, but Pakistan is currently unable to generate electricity according to this capacity.

Pakistan's access to this capability was achieved through CPEC project and because of CPEC it was decided that Pakistan would survive the power crisis and such projects were completed under CPEC.

But, unfortunately, these power plants are not producing at their capacity and until this problem is overcome, the power crisis in Pakistan will continue to hurt the national economy and growth rate. It is a bitter truth that in the last four years, the pace of work on CPEC has not been maintained and it could have played a key role in relieving the country of its energy crisis.

For example, some of the power plants set up under CPEC are closed due to non-payment. As a result, out of 5,000 megawatts, about 2,000 megawatts are inactive. In September last year, the then head of government accepted the slow pace of work on the CPEC projects, citing Corona as causing some problems in CPEC, but claimed that work on CPEC is now in full swing. But still, the slowness did not make a difference. This situation is affecting the industry as well as urban life. About 38% of the Chinese-assisted power plants under CPEC have been shut down and 2,000 megawatts of electricity are not being generated. The country is witnessing an increase in load shedding. And the reason for this was that the problem of non-payment came to the fore and due to non-payment of Rs 300 billion, and some power plants were shut down.

It should be noted that this problem is not limited to the power plants connected to CPEC and it was not being discriminated against but it is also a problem of power plants besides CPEC some of the shutdown power plants use coal as fuel. Payments could not be made due to an increase in the price of coal in the global market and other reasons. There was another problem that led to the slowdown. In the last supplementary budget (2021), 17 percent import tax exemption was also abolished on power plants under CPEC, which caused problems for these power plants. Thus, seven power plants under construction were affected. ۔

There is a need to reinstate the tax exemption through FBR, as well as to immediately open the revolving account for CPEC power plants, which has been pending for a long time. If these issues are given full attention at this time and these projects linked to CPEC are fully reactivated, Pakistan will soon be on the path to economic recovery and will achieve this goal.

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