Pakistan faces an unexpected dilemma: too much electricity 

A family sits by its tent in front of DPS thermal power station in Muzaffargah, Punjab Province Pakistan, on September 5, 2010. (AFP)
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Updated 25 February 2021

Pakistan faces an unexpected dilemma: too much electricity 

  • Large-scale construction of new power plants funded by China has dramatically boosted energy capacity
  • But even as supply surges, electric power is still not reaching up to 50 million people in Pakistan

KARACHI: After suffering decades of electricity shortages that left families and businesses in the dark, Pakistan finds itself with a new problem: more electrical generating capacity than it needs.
Large-scale construction of new power plants — largely coal-fired ones funded by China — has dramatically boosted the country’s energy capacity.
“It’s true. We are producing much more than we need,” Tabish Gauhar, a special assistant to the prime minister on power, told the Thomson Reuters Foundation by telephone.
But even as supply surges, electric power is still not reaching up to 50 million people in Pakistan who need it, according to a 2018 World Bank report, though expansion of tranmission lines is planned.
Power outages also remain common, with a transmission problem just last month leaving many of the country’s major cities in the dark.
Excess fossil fuel energy capacity also is boosting electricity costs — and raising questions about whether the country will now manage to achieve its climate change goals, with scientists saying coal needs to rapidly disappear from the world’s energy mix to prevent the worst impacts of climate change.

RENEWABLES AIM?
Last year, Prime Minister Imran Khan promised that Pakistan by 2030 would produce 60% of its electrical power from renewable sources.
Currently the country gets 64% of its electricity from fossil fuels, with another 27% from hydropower, 5% from nuclear power and just 4% from renewables such as solar and wind, Gauhar said.
The country has already scrapped plans for two Chinese-funded coal plants — but another seven commissioned as part of the sweeping China-Pakistan Economic Corridor (CPEC) project have gone ahead, and are expected to add up to 6,600 megawatts of capacity to the grid.
China has also funded new renewable energy but at a smaller scale, with six wind farms set to generate just under 400 MW of power, a 100 MW solar project and four hydropower plants expected to produce 3,400 MW by 2027.
CPEC aims to boost road, rail and air transport links and trade between China, Pakistan and other countries in the region, as well as boosting energy production.
Vaqar Zakaria, the head of Hagler Bailly Pakistan, an environmental consultancy firm based in Islamabad, said Pakistan’s coal-heavy power expansion was in line with its own former national aims.
“I think blaming the Chinese may not entirely be fair as setting up projects on local and imported coal was our country policy and priority,” he said.
Officials at the Chinese embassy in Islamabad did not respond to calls and email asking for comment.
As new largely coal-fired plants come online, Pakistan is expected by 2023 to have 50% more power capacity than currently needed.
Because the government must repay loans taken to build the plants and has signed contracts to buy their power, the overcapacity is producing costs “the government has to pay to the power producers under binding contracts, regardless of actual need,” Gauhar said.
“Our fixed-capacity charges have gone through the roof,” he added.
Those costs currently stand at 850 billion rupees ($5.3 billion) a year, but will rise to almost 1,450 billion rupees ($9 billion) a year by 2023 as new largely coal-fired power plants still being built come online, he said.
That is driving up rates consumers pay for power — 30% in the last two years, Gauhar said — a problem likely to continue unless Pakistan can find more buyers for its new generating capacity, such as by boosting manufacturing or pushing use of electric vehicles.
The government plans to decommission some older fossil fuel plants to cut overcapacity, he said — but it also pushing ahead to add new wind, solar and hydropower capacity to the grid to meet its climate goals.
The government is holding talks to renegotiate tariff rates with the country’s independent power producers, including fossil fuel, hydro, wind and solar companies, he said.
Whether it will seek similar rate renegotiations on Chinese-funded plants still in the pipeline, or longer debt repayment periods, remains unclear.

GAINING POWER
When electricity projects now in the pipeline are completed in the next few years, Pakistan will have about 38,000 MW of capacity, Gauhar said.
But its current summertime peak demand is 25,000 MW, with electricity use falling to 12,000 MW in the winter, he said.
Saadia Qayyum, an energy specialist with the World Bank, said energy over-production was a better problem to have than undersupply as it allowed for growth — but the country needed new ways to use the electricity.
But incentivising electric transport, for instance, will be less than a green solution if a big share of the country’s new electricity is produced by coal plants, energy analysts said.
Gauhar said the government is offering discounted electricity tariffs to industrial customers, to try to lure those now dependent on their own gas-fired plants back to the national grid.
But demand for grid power “is a function of price, availability and reliability,” noted Zakaria, the environmental analyst — and high prices are likely to suppress demand and incentivise power theft, a serious problem in the country.
He predicted high-end residential and commercial customers would end up footing the bill for the excess generation capacity, as industries and agriculture receive power subsidies.
That could mean “paying customers will use less electricity, further worsening the situation,” particularly as more see an economic advantage in buying their own solar panels.
Despite the country’s energy surplus, the World Bank is investing $450 million over the next four years in renewable power in Pakistan, to try to cut the nation’s reliance on fossil fuel imports and lower energy costs, Qayyum said.
Gauhar said Pakistan would need some level of fossil-fuel-powered energy in coming years to help balance “intermittent” sources like solar and wind which do not generate electricity 24 hours a day.
But he said the long-term plan, still being discussed, was to have coal plants contribute no more than 15% of the country’s electricity capacity.


Experts, politicians sound alarm as audio leaks put Pakistan national security, PM house ‘at stake’

Updated 7 sec ago

Experts, politicians sound alarm as audio leaks put Pakistan national security, PM house ‘at stake’

  • Experts call for strict compliance with protocols as audio recordings of conversations between key officials leaked
  • Ruling party's Talal Chaudhary called events “serious issue of national security,' saying government taking "very seriously"

ISLAMABAD: Intelligence and cyber security experts on Monday called for strict compliance with protocols as a slew of audio recordings of conversations between key government figures, including Prime Minister Shehbaz Sharif, were leaked online over the weekend.

The leaks involve discussions between Sharif and members of his cabinet, including conversations with ruling party leader Maryam Nawaz over the performance of outgoing finance minister Miftah Ismail, and with an unidentified official about the possibility of facilitating the import of Indian machinery for a power project for Nawaz’s son-in-law.

Opposition leader Chaudhry Fawad Hussain, a close aide to ex-PM Imran Khan, demanded an inquiry into the leak, saying the results should be shared with the public. Information Minister Maryam Aurangzeb said in a statement on Sunday the leaks had not revealed that the government was involved in any “illegal act.”

However, addressing a press conference in Faisalabad on Monday, ruling party leader Talal Chaudhary called the events a “serious issue of national security.”

“The audio leaks issue was taken very seriously because the national security and the sanctity of the prime minister's house are at stake,” he said.

Speaking with Arab News, intelligence and cybersecurity experts called for strict compliance with protocols and procedures.

“These data hacks occurred because advisories, recommendations, and precautions advised by the concerned institutions and departments were not followed in letter and spirit,” cybersecurity expert Tariq Malik told Arab News. “All the top officials have to cooperate with concerned departments to secure all technological devices including smartwatches and strictly follow the protocols and procedures given by the concerned authorities.”

Former additional director general Federal Investigation Agency (FIA) Ammar Jafri called the leaks a “serious threat.”

“All should take it beyond politics as it is a matter of the state of Pakistan, not any particular political party,” he told Arab News.

“The telephones of all the senior people related to these offices should be thoroughly checked by the security institutions, to find any viruses or such things. Secondly, all the officials should be strictly prohibited from downloading unnecessary applications, and thirdly the premises should be thoroughly screened and it should be done frequently.”

Bashir Wali Mohmand, a former director general at the Intelligence Bureau (IB), said the data of the prime minister’s office was top secret and taken care of accordingly by concerned departments.

“This leak is not a big thing as it has not indicated any direct threat to the prime minister's life,” he told Arab News.

Pakistan last year called on the United Nations to investigate whether India used Israeli-made Pegasus spyware to spy on public figures including then PM Imran Khan.

The Pakistani leader's phone number was on a list of what an investigation by a group of 17 international media organisations and Amnesty International said were potential surveillance targets for countries that bought the spyware.


Investors pin hopes on ‘Daronomics,’ outgoing finance minister to have ‘no role in government’

Updated 50 min 53 sec ago

Investors pin hopes on ‘Daronomics,’ outgoing finance minister to have ‘no role in government’

  • Ishaq Dar to take over as finance minister from Miftah Ismail, investors hopeful he will stabilize rupee and tame inflation
  • Dubbed Darnomics, Dar’s approach kept rupee stable between Rs98 and Rs105 against greenback during previous stint

KARACHI: Pakistan’s currency and equity markets on Monday celebrated the return of Ishaq Dar as the finance minister of Pakistan, with investors pinning hopes that a new era of “Darnomics” would stabilize the rupee and tame inflation, analysts and economists said. 

Dar is a member of Prime Minister Shehbaz Sharif’s ruling PMLN party and has already been finance minister four times.

Dubbed Darnomics, Dar’s approach kept the rupee stable between Rs98 and Rs105 against the greenback during his last stint in office from 2013-2017 but he was widely criticized for deliberately undervaluing the rupee by pumping dollars in the market. 

The Pakistani rupee gained in value by 1.11% or Rs2.63 to close at Rs237.02 against the United States dollar in the interbank market on Monday, and gained Rs6.90 to trade at Rs237.50 in the open market following the reports of Dar’s return. Dar is expected to take charge this week.

While media has reported now former finance minister Miftah Ismail will remain part of the government’s economic team, the outgoing official told Arab News on Monday: “I will have no role in the government.”

Speaking to local media before departing for Pakistan from London where he has lived in exile since 2017 when he was disqualified from office by a court in a corruption case, Dar said:

“I am returning to the same office that I left five years back. This is Allah’s blessing … This will be my aim, to bring Pakistan’s [economy] back on track. The economy is constantly faltering and we will try to change its direction.”

Dar takes over as the economy faces one of its worst balance of payment crises, and recent floods are estimated to have cost it nearly $30 billion.

Earlier this month, the government cut its GDP growth forecast below 3% from a 5% budgetary target for 2022-23.

“Ishaq Dar is known for keeping the exchange rate stable for stronger currency, that is why the currency market has strongly reacted to his return resultantly the rupee gain some strength,” Samiullah Tariq, Director Research at Pakistan Kuwait Investment Company, said.

Economists said Dar’s return would bring some “comfort” to the currency market and tame increasing inflation, which is at a 47-year high at 27.3%.

“Ishaq Dar is being brought back by the coalition government keeping in view his past track of keeping the exchange rate under control,” Dr. Sajid Amin, Deputy Executive Director at the Sustainable Development Policy Institute (SDPI), told Arab News.

“The first priority of the coalition government is to bring stability in the value of rupee as the national currency has fast eroded its value against the US dollar despite International Monetary Fund (IMF) program revival,” he added.

Economists said the coalition government of PM Shehbaz Sharif had paid the political cost of much-needed measures taken by the outgoing finance minister, including the withdrawal of fuel subsidies and fast depreciation of the rupee.

“When the rupee depreciates, the public attributes it to the performance of the economic managers. As a political party this has been the discourse at some level and the decision to bring Dar has been taken in order to show economic performance and improve the image in the eyes of the public.”

The government’s decision to replace Ismail with the Dar reflected the coalition government’s need to immediately “showcase” performance “due to the short time available to the election next year,” Amin said.

“Government wants to go into the election with a new image, with a new market and public feelings that it has improved things … exchange rate and inflation, two key indicators,” he added.

But many economists said Dar’s return would have little effect.

“Changing faces may have limited impacts as we are facing both global and domestic recessions,” Khurram Schehzad, CEO at Alpha Beta Core, a startup investment advisory platform, told Arab News. “Options are limited and the economic situation is challenging. So expecting something extraordinarily different from another person would not be prudent.”

Pakistani industrialists said the incoming finance minister would have to deal with a plethora of issues, chief among them political instability.

“Pakistan is facing a very difficult time at the time when Ishaq Dar is coming back … current account deficit, trade deficit, debt repayments, high inflation, and rupee dollar parity are among them,” Zubair Motiwala, chairman of the Businessmen Group at the Karachi Chamber of Commerce and Industry (KCCI), told Arab News.

“The big problem is political stability ... instability is the mother of all economic evils in Pakistan so he will have to deal with it. Our best wishes are with him and we pray for the speedy improvement of the issues the country is facing right now.”

Pakistan stocks closed bullish with the benchmark KSE100 index settling at 41,151 level, up by 531 points or 1.31%.

“Bullish activity witnessed on strong rupee recovery amid decision over the appointment of a new finance minister, which is likely to stabilize economic uncertainty,” Ahsan Mehanti, CEO of Arif Habib Corporation, said.


Islamabad court extends custody of journalist Ayaz Amir, son in beating death of Canadian woman

Updated 26 September 2022

Islamabad court extends custody of journalist Ayaz Amir, son in beating death of Canadian woman

  • Sarah Inam was allegedly killed by her husband Shahnawaz Amir “with dumbbells” last week
  • Police say Inam’s family is expected to arrive in Islamabad from Canada by Tuesday to pursue case

ISLAMABAD: An Islamabad district court on Monday extended the custody of veteran journalist Ayaz Amir and his son Shahnawaz Amir in the case of the murder of the latter’s wife in Islamabad last week.

Sarah Inam, a 37-year-old economist, had wed Shahnawaz around three months ago and was allegedly murdered by her husband at the suspect’s mother’s home in Islamabad on Friday. The murder took place a day after Inam had returned from Abu Dhabi where she works.

The police arrested Shahnawaz from the crime scene on Saturday morning while his father was arrested late on Sunday night.

The police on Monday presented both suspects before judicial magistrate Amir Aziz Khan after their physical remand expired.

A deputy superintendent of police Hakim Khan said Inam’s family was expected to arrive in Islamabad from Canada tonight, Monday, to pursue the case.

“The police will record their statements, and if necessary, some more sections could be included in the already registered FIR,” he told Arab News. “The police will be fully cooperating with the victim’s family to take this case to the logical conclusion.”

During Monday’s hearing, the investigation officer in the case, Inspector Habib-ur-Rehman, requested the court to extend police custody of the suspects as officers had yet to complete their investigation.

The judge inquired about Ayaz’s role and the inspector said he had been nominated by the victim’s uncle and aunt. He said the victim’s parents lived in Canada and would reach Pakistan by tomorrow, Tuesday.

“We need to determine the role of Ayaz Amir in the nikah [marriage contract], therefore the court should grant extension in his remand,” the inspector said.

Addressing the judge, Amir said he was “traumatized.”

“I had informed the police about the incident and even guided them to the farmhouse where the murder took place,” the journalist said. “Police have not asked me anything during the remand … Have they got any new evidence against me [to seek the remand extension]?”

The journalist questioned why the police were trying to link him to the murder. “Can you [the police] furnish any evidence of my involvementt?”

The court extended Shahnawaz’s remand for three days, while Ayaz’s remand was extended for a day.

Earlier in the day, additional sessions judge Sheikh Sohail granted interim bail to Shahnawaz’s mother, Sameena Shah, for three days and directed her to be part of the investigation.

In her bail petition to the court, Shah said her son Shahnawaz had informed her about the murder on Saturday morning in a phone call. She said she had no connection with the murder and was willing to cooperate with the police in the investigation.

According to the first information report, registered on the complaint of Shahzad Town Station House Officer Nawazish Ali Khan, Shahnawaz’s mother called police on September 23 and informed them that Shahnawaz had murdered his wife “with a dumbbell.”

“My son is present in the house and has hidden the body,” the FIR quotes Sameena as saying, adding that the police subsequently raided the house.

“He had locked himself up in his room. When they broke inside, there were stains of blood stains on Shahnawaz’s hands and clothes,” the police said in the complaint. “He then confessed that he had repeatedly hit his wife with a dumbbell during an argument and then hid her body in the washroom’s bathtub.”

Shahnawaz also said he had “hidden” the murder weapon under his bed, which police subsequently found and sent for a forensics examination.


Southern Pakistani province plans to move thousands of flood-hit people to ‘tent city’

Updated 26 September 2022

Southern Pakistani province plans to move thousands of flood-hit people to ‘tent city’

  • The tent city in Karachi’s Malir district includes 1,300 tarpaulin camps to house flood-affected people currently staying at Karachi schools
  • Floods have inundated around 15,000 schools Sindh, while education activities remain suspended at another 5,000 facilities housing affectees

KARACHI: Authorities in Pakistan’s southern Sindh province on Monday said they were moving thousands of people displaced by catastrophic floods to a “tent city” on the outskirts of the port city of Karachi.

Torrential rains and floods have killed more than 1,600 people and affected 33 million across Pakistan since the beginning of monsoon season in mid-June. The deluges have forced 1.45 million people out of homes in the southern Sindh province, washing away most of their crops.

The provincial government has accommodated these displaced people in 5,000 government-run schools across the province, with 30 schools housing the affectees in Karachi.

Local authorities have decided to move these thousands of affectees from government-run schools in Karachi’s East district to hundreds of tarpaulin camps in the Malir district on the outskirts of the megapolis.

“About 7,000 people living in our relief camps would be shifted and the schools will be vacated,” said Raja Tariq Chandio, deputy commissioner of the East district, where most of the schools sheltering displaced people are situated.

Irfan Salam, deputy commissioner of the Malir district, said authorities had erected 1,300 shelters along the Malir link road, while K-Electric, the city’s sole power distributor, was also laying a power transmission line to supply electricity to these camps.

“In the tent city, flood victims will have safe drinking water and cooked meals. It has 20 washrooms and a hospital with men and women doctors and paramedics,” Salam told Arab News.

“It will take at least 10 days for K-Electric to set up the power transmission line, but we will start providing electricity through generators as we plan to move flood victims within the next two days.”

He said a charity had committed to provide breakfast, lunch and dinner for the displaced people, for which a kitchen was being set up.

The Sindh education foundation would also set up a school to impart education to children of these flood-affected people, Salam added.

The deadly floods have inundated around 15,000 schools across the southern Pakistani province, while education activities remain suspended at another 5,000 institutes housing the affected masses.

Around 2.5 million students enrolled at these 20,000 schools may drop out this year as the province lacks resources to make educational facilities functional soon after floodwater recedes from marooned areas, according to Sindh Education Minister Sardar Ali Shah.

After the relocation of affected masses to the Malir district, officials say classes will resume at 30 government-run facilities housing them in Karachi’s East district.

Javed Shah, a teacher at the Government Boys Primary School in the district, told Arab News the local administration had communicated to them that the schools would be vacated this week, but it would take another few days to make arrangements for resumption of classes.

“We are happy that classes are going to resume soon,” Shah told Arab News. “We will bring the schools to order to resume classes.”


Dubai's DP World announces $2.5 million in flood assistance to Pakistan

Updated 26 September 2022

Dubai's DP World announces $2.5 million in flood assistance to Pakistan

  • The logistics firm's chief announced last week he planned to set up industrial parks in Pakistan
  • Sheikh Sultan bin Sulayem said Pakistan had a huge investment potential and human resource

ISLAMABAD: DP World, one of the world’s largest logistics and port terminal operators headquartered in Dubai, has announced donating $2.5 million to Pakistan, the United Arab Emirates (UAE) embassy said on Sunday, after massive floods caused widespread death and destruction in the South Asian country. 

Cataclysmic floods have killed at least 1,638 people, displaced more than 33 million and inundated a third of Pakistan since the onset of monsoon season in mid-June. 

The deluges have damaged millions of homes, swept away livestock and standing crops, causing an estimated loss of $3 billion to the South Asian country, already grappling with an economic crisis. 

The announcement of $2.5 million donation came after DP World Chairman Sheikh Sultan bin Sulayem's meetings with Pakistan President Arif Alvi and Army Chief General Qamar Javed Bajwa. 

"DP World supports the relief efforts in the aftermath of floods and torrential rains that hit large parts of the Islamic Republic of Pakistan and announces to donate $2.5 million dollars to the Pakistan Army's Flood Relief account," the UAE embassy in Islamabad said on Twitter. 

The DP World chairman arrived in Pakistan on Friday to assess the scale of the disaster, which officials have blamed on human-driven climate change. 

Sheikh Sultan said he was interested in setting up industrial parks in Pakistan, which had a huge investment potential and availability of human resource.  

“The vision I have is to open industrial parks in Pakistan which will be equipped with modern infrastructure,” he said at a press conference in Karachi on Friday.  

"Human resource is no problem in Pakistan as the country has many highly educated engineers, who will work in these industrial parks."  

The Dubai-based logistics firm already operates a container terminal at the Karachi port. 

Pakistan and the UAE have close fraternal relations and bilateral cooperation in a range of fields. The UAE is also Pakistan’s largest trading partner in the Middle East and home to more than 1.6 million Pakistanis.