Power minister

[HASEEB ANSARI]

Power minister
By Dr Farrukh Saleem

Sir, there are 12 government-run registered companies that collectively lose Rs400 billion a year. They are: Lesco, Gepco, Iesco, Fesco, Mepco, Hesco, Qesco, Pesco, Jamshoro Power, Central Power, Northern Power and Lakhra Power. Sir, if you are the de facto appointing authority of the chief executive officers of the dirty dozen, then the Rs400 billion burden is on your shoulders.

Sir, your experts are telling you three things: our fuel mix is not right; we will convert furnace oil-boilers to coal and that we need to jack up the tariff by a wholesome 70 percent. This is all hogwash; pies in the sky.

To begin with, developing huge coalmines require billions of dollars – billions that we don’t have. Second, conversion kits will cost a couple of billion dollars – billions that we don’t have. Third, no one will finance the burning of coal. Fourth, the supply-chain infrastructure will cost billions of dollars – billions that we don’t have. Finally, the PPP doubled the tariff with no end to circular debt (higher tariff means more theft). Sir, none of that is ever going to happen to any significant degree to make much of a difference.

Sir, a single 500 MW plant needs 3,337,000 kg of coal a day. Consider this: we will need 100,000 tons of coal a day and our current production is 8,000 tons a day. We need billions of dollars to set up a complete supply-chain of thousands of coal-carrying trucks and thousands of rail freight bogies connecting the port and the power plants. Can China help? We may be able to convert a few hundred megawatts, but please don’t hold out for pies in the sky.

Dear Minister, some 200 so-called state-owned enterprises (SOEs) lose Rs500 billion a year. Of the 200 SOEs, a total of 12 manage to lose Rs400 billion a year; 80 percent of the entire loss. Sir, take care of the dirty dozen and you would have taken care of 80 percent of the filth. Of the Rs400 billion, 50 percent is theft and the other 50 percent is owed by various governments, federal and provincial.

Sir, the federal government, its attached departments, autonomous and semi-autonomous bodies, joint staff headquarters, military dairy farms, the President’s House, the PM’s Secretariat, the residence of chairman senate, residences of federal ministers, the Election Commission, the Supreme Court, the Federal Police, the Intelligence Bureau and the FIA all owe billions.

Dear Minister, Sindh owes Rs61 billion, Punjab Rs9 billion, AJK Rs20 billion and the KESC Rs50 billion. Of the Rs400 billion loss, one-half is theft (and inefficiencies); electricity theft, transformer theft, cable theft and furnace oil theft (the other half is owed by the government and the private sector).

Sir, the good news is that you will be able to find strategic partners/operators for the Gencos. Sir, the good news is that there is market appetite for the distribution companies. There is just no way that you – or your ministry – can restructure the Discos; they must be privatised straight away. Start with the best – Fesco, Gepco, Lesco and Iesco – where bill-collection losses are 1.5 percent, 1.5 percent, 4 percent and 4.2 percent, respectively. Next, professionalise Nepra.

Dear Khawaja Sahib, coal is baloney and ‘baloney is the lie laid on so thick you ought to hate it and blarney is flattery laid on so thin most ministers love it’.

The writer is a columnist based in Islamabad. Email: farrukh15@hotmail.com

Twitter: @saleemfarrukh