By Qamar Bashir
During a cabinet meeting, the Prime Minister reiterated the achievements of his brother, Mian Nawaz Sharif, in controlling the electricity load shedding crisis that had plunged the country into darkness and strangled the economy. However, he failed to acknowledge that the same Independent Power Producers (IPPs) brought into Pakistan under shortsighted policies and highly favorable “buy or pay” terms have resulted in Rs. 2.3 trillion ($14 to $15 billion) of circular debt. This has strained the country’s scarce financial resources and skyrocketed electricity prices, making them unaffordable for the ultra-poor and even the high middle class. The economy has been crippled, with domestic consumers groaning under hefty electricity bills, leading some to commit suicide due to their inability to pay.
The small and large-scale manufacturing sectors are struggling to survive in the open market due to exorbitant input costs, which are reflected in the prices of their products. Investors are shying away, knowing that products manufactured in Pakistan have little chance of capturing the market. This is due to the availability of the same products at much lower costs and better quality from many other countries that offer a sustainable supply of inputs, a stable political environment, repatriation of profits, consistent policies, and a better image of the country.
In his live speech, the Prime Minister pointed finger at two sectors: power sector and FBR, terming them “two boats” that, according to him, if kept afloat, will put the country on the path of progress and development. However, if they sink, the country will sink further into abysmal social, cultural, and economic downgrading, leading to total destruction.
Ironically, during his speech, the Prime Minister veered off-topic multiple times. He started by criticizing Jamaat-e-Islami (JI) for holding a sit-in against the unbearable hike in electricity prices. He then shifted to criticize PTI for its insensitivity and failure to add even a single watt to power generation during its ten-year government in KP and its less than four-year government in the center. He proceeded to praise himself and his government for their hard work, which he claimed was being impeded by the anti-state politics of the opposition. He also praised the military leadership for helping the government survive and condemned the PTI’s founder for putting bilateral relations with the USA at great risk by waving the Cypher at a political rally. Later, he jumped to condemn a deplorable fatal attack by Israel in Iran that killed Hamas leader Haniyeh and promised to pass a resolution in the National Assembly.
However, he failed to provide any solution to the electricity price hike or to suggest improvements in the Federal Board of Revenue.
During my 40 years of government service, it became evident to me early on, that the performance of a civil servant is not measured by doing the right thing and observing the rule of law, but by doing the unlawful in a lawful manner. While other officers may not share my experience, this does not change the reality. In our country, vested interests are so deeply entrenched in every part and conduit of our system that we have lost sight of truth, objectivity and national interests. The harsh reality is that our system is intricately woven to protect these vested interests, rewarding those who align themselves with the powers that be—whether politicians, civil or military bureaucrats, or their benefactors and beneficiaries among big businessmen, industrialists, real estate tycoons, bankers, or even smugglers.
For example, one of the biggest reasons for the electricity crisis is line losses and electricity theft. Pakistan produces approximately 130-140 billion kWh of electricity annually, with an average production cost of Rs. 10-12 per kWh. Out of this around 18-20% wasted due to line losses and 10-12% due to electricity theft. The financial impact of transmission and distribution losses is about Rs. 271-292 billion annually, while electricity theft costs an additional Rs. 157-169 billion. In total, the combined financial loss due to line losses and theft is approximately Rs. 428-461 billion annually (around $2.56-2.79 billion), placing a substantial burden on the economy and contributing to the circular debt crisis in Pakistan’s power sector.
We all know that neither domestic consumers nor small businesses or the industrial sector have the influence or means to steal this much electricity without the express consent of the government, the bureaucracy, or distribution companies. These entities benefit from weak and easily manipulatable electricity production and distribution systems and, therefore, have neither the desire nor the will to automate the system out of fear of losing control.
Fact is that there are distribution solutions available which if set in place could reduce the line losses and electricity theft to zero such as the Advanced Metering Infrastructure (AMI). This system traces every watt of electricity from production to final consumers. It includes smart meters installed at generation stations, substations, and consumer premises to measure real-time electricity usage. Communication networks transmit this data to central databases, while data management systems collect, store, and analyze it. SCADA systems monitor and control electricity transmission and distribution, and Energy Management Systems (EMS) optimize grid operations by balancing supply and demand. Geographic Information Systems (GIS) provide spatial data for the grid, and Meter Data Management Systems (MDMS) ensure accurate data processing for billing and analysis. Implementing an AMI system in a country like Pakistan could cost between $4.55 billion and $7.25 billion allowing the country to comprehensive monitoring, management, and optimization of the electrical grid. The entire cost of installation of this system will be recouped within two years by saving the cost of lineline losses and cost of the electricity theft.
However, our elite—including politicians, civil and military bureaucracy, and their benefactors and sponsors—have neither the will nor the desire to implement these solutions. Much like other systems that lack transparency and have weak command, control, and reporting mechanisms, they allow elites to divert the wealth generated by these systems to serve their vested interests. Yet, hope remains that one day civil society as a whole will rise to challenge and dismantle these entrenched practices.
By Qamar Bashir
Former Press Secretary to the President
Former Press Minister to the Embassy of Pakistan to France
Former MD, SRBC
