"It infuriates the mind that despite Pakistan had a bumper harvest, then, why is the whole of Pakistan out in the streets?"
Influence of Nightmares: Energy and Food Crises '07-'08 (Part V)
FOOD FOR THOUGHT AND THOUGHT DROUGHT Amna Batool Tuesday, April 21, 2009
Pakistan faced one of the biggest food crises in year 2007-8. There was a severe shortage of wheat throughout Pakistan despite the bumper harvest of 23.7 million tons in the previous year. There are several reasons behind this crisis. It truly is mind boggling that a country which is 60 years old cannot make far sighted decisions. The reasons given by our politicians and government officials were that since Pakistan had such a good harvest they exported wheat in such a large number that a shortage occurred in our own country. To make matters worse than ever, government had exported wheat at $225-232 per ton and when they had wanted to import wheat as people were out in the streets creating havoc, wheat prices had risen to $380-400 per ton, exclusive of transportation. The inflation of wheat exceeded oil, gold, metals in year 2008; and hence our import prices of wheat doubled yet again.
If a person looks at the reasons behind this shortage closely, it feels like a child play. It infuriates the mind that despite Pakistan had a bumper harvest, then, why is the whole of Pakistan out in the streets? Why do we see mothers carrying their starved wailing children in front of the television cameras? Many reports told that children were caught red handed while stealing wheat from their neighbor’s homes. All the concerned authorities had to say to this shortage was that it was due to bad planning, mismanagement and hoarding by the people. It surely does not seem real because if there are offices set up just to regulate wheat in the country; people assigned to predict and make future plans; with TV channels telling day and night about the inflation, still our authorities remain in a fool’s paradise and export the wheat expecting to gain profit. Either there are children playing at these offices or a foreign plan at work to disintegrate Pakistan. The US has claimed time and again that Pakistan would disappear from the map of the world given the incessant crises that Pakistan goes through. Well, it seems like they are proving it right, episodes like wheat crisis and electricity shortage are being created; because a normal human mind cannot be satisfied by reasons like mismanagement or bad planning or even hoarding. For the masses in Pakistan, which consists of about 70% rural population, prosperity is assessed through food, water and shelter availability.
According to some other conspiracy theories, it is suggested that the wheat episode was created in Pakistan to divert people’s attention from the issues of the Presidency seat. As people were out with their teeth and claws to dethrone President Musharraf, he wanted a bigger issue to distract people and the wheat crisis did the job.
Wheat issue prevailed over more than 2 years as the price of a 20 kg wheat bag or even less was not affordable by the people. The human cry died down as another nightmare hit Pakistan- electricity shortage. This was yet another crisis- wheat deprived humans from having food, while electricity deprived people from living- literally from living in a modern world.
Stone Age hit Pakistan which had and has people up in arms throughout the country. The situation took such a bad turn that WAPDA (Water and Power Development Authorities) and KESC (Karachi Electric Supply Company) –the power generation entities in Pakistan- resorted to extremely long power cuts. In small cities load shedding lasted from 20-22 hours a day and even in cities like Karachi it lasted for 18 and more hours.
Present total power production capacity in the country is 19500 MW. Almost two third is generated from Thermal Power (13000MW), one third from Hydel Power (6500MW) and our Nuclear Power Plants generate 450 MW and Coal does 150 MW. This problem started back 10 years. The authorities (WAPDA) constantly told the previous government that Pakistan was in some serious need of setting up more power plants. Despite the requests and warnings, in the past 9 years not a single power plant was set up. The present power crisis cannot be blamed on bad management and lack of foresight totally. The conspiracy is what exactly kept the government from setting up new power plants? What took President Musharaff so long to realize the problem so evident in the statistics and figures? Why did he take so long to go talk to the owners of IPPs (Independent Power Producer)? and by then he did not have enough money to pay them to set up the plants since inflation was making the world rock.
It is very important to understand the consequence of the prevailing situation. Current price of furnace oil is about Rs 49,000 per ton, which amount up to Rs 49/- per kg. On an average one kg of furnace oil produces 3.8 kWh of electricity. Thus, the cost of furnace oil for generating one unit of electricity is about Rs 13. On top of this the fixed cost of a thermal plant works out to be about Rs 3 per unit. Therefore, one unit (kWh) of the electricity produced by all thermal plants using furnace oil is Rs 16 per unit. According to WAPDA/IPP agreement, the private power producers will charge WAPDA the actual fuel cost for which they have a direct contract with PSO. As we all know that WAPDA tariff charged from the consumers is about Rs 5 per unit (kWh).
The production cost of furnace oil electricity is Rs 16 per unit, add to it the transmission, distribution cost (including loses), the total cost of such electricity works out to approximately Rs 22 per kWh. The difference between WAPDA tariff and the furnace oil electricity is Rs17 per kWh. It is estimated that the country consumes at least 25 billion units of electricity produced annually through furnace oil, which amounts to the total deficit of Rs 425 Billion. If WAPDA has to balance its books it would require a subsidy of Rs 425 Billion. This deficit is somewhat reduced due to cheap power produced through hydel energy and natural gas, but the deficit cannot change substantially, unless bulk of electricity is produced through Hydel energy. Obviously, a deficit of Rs 300-350 billion cannot be sustained, the government does not have resources to pay such a huge subsidy, it is also not feasible to increase the power tariff very much. Therefore the power crisis is far greater than what is being perceived. In the absence of extremely heavy subsidy, WAPDA is delaying payments to IPPs and also to the oil companies. The result is that IPPs are now producing much less electricity than their capacity.
President Zardari took notice of the problem when violent anti government protests erupted throughout the country. These are the after effects of the self created problems. Finally 16 private power projects with a capacity of above 5500 MW which are in operation were set up. This is roughly one-third of the total power generation capacity of Pakistan. This is still not enough and news on the channels warn us that the people will see the worst of load shedding this coming summer of 2009.
