GOOD NEWS FOR ALL PAKISTAN Non-stop power supply for high tariff proposed

ISLAMABAD: With a resolution of the energy crisis not in sight, the government has developed a ‘novel idea’ of providing ‘guaranteed and uninterrupted power supply’ to wealthy consumers who agree to pay high tariff for electricity produced by expensive power plants.


As a first step the scheme called “uninterrupted electricity supply tariff” would be introduced in industrial zones, but would also be available to consumers agreeing to forgo normal tariff and purchase electricity produced at high cost, a senior government official told Dawn.

The scheme, expected to be made part of the new federal budget, comes at an interesting time when the PPP government, with its populist manifesto, is reconciled to the fact that energy shortages would be there for some years. The new ‘guaranteed and uninterrupted’ power supply mechanism has been made part of next year’s annual plan.

Increased demand for construction because of caused by floods and the government scheme to introduce uninterrupted electricity supply tariff for industrial zones is expected to improve (industrial) performance, says the annual plan for 2011-12.

The official said that currently the power purchase price of Hub Power Company (Hubco) of an average Rs12 per unit was the highest, which would soon be overtaken by Karkey Plant, a Turkish rental power plant, whose power purchase price would hover around Rs16 per unit.

Industrial consumers would be offered to purchase power at high rates with a guarantee from distribution companies and the government that they would get round-the-clock supply.

The National Electric Power Regulatory Authority (Nepra) would approve, he said, special terms and conditions and special sale rates for such industries to ensure legal implementation and define penalties for failures.

Currently, the Nepra-approved average tariff is about Rs9.57 per unit while average tariff charged to consumers is about Rs7.94 per unit, because of over 22 per cent system losses.

The official said the proposal was taken up after a study concluded that power shutdowns were translating into Rs500 per unit (KwH) economic loss to the economy, of which 80 per cent was suffered by the industry.

He said that after meeting the demand of such consumers, the remaining power would be distributed among other categories of consumers.

He said the privatised Karachi Electric Supply Company was already using a similar scheme by carrying out long hours of loadshedding in residential areas and providing maximum electricity to industrial consumers.

The government says that large-scale manufacturing (LSM) is estimated to post a modest growth of 1 per cent during the current fiscal year with acute energy shortages and steep decline in foreign investment continuing. In July-March period
this year, a negative growth of 2.3 per cent in food, negative 4.8 per cent in petroleum products and negative 6.8 per cent in fertilisers was reported.

“The overall picture of the industry also remains unsatisfactory and a negative growth of 0.1 per cent is expected against the target of 4.7 per cent” during the current year, according to an official working paper.