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John Daly

John Daly

Dr. John C.K. Daly is the chief analyst for Oilprice.com, Dr. Daly received his Ph.D. in 1986 from the School of Slavonic and East European…

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Pakistan's Shambolic Electrical Sector Stymies Exports

Pity poor Pakistan, a nuclear-armed nation nevertheless walking the edge of an electrical crisis impacting not only consumers, but now exports as well.

The number crunching is simple…

With about 50 percent less electricity generation capability than the actual demand, Pakistan’s National Grid currently faces more than a 5,000-megawatt shortfall in power generation, leading to blackouts in both urban and rural areas of the country. Last summer, due to unscheduled shortages by the National Power Control Center, urban areas suffered sudden blackouts of up to eight hours, while some parts of the country were deprived of electricity for up to 22 hours a day.

Now, a “perfect storm” is developing in Pakistan, where exporters are complaining that intermittent power supplies are playing havoc with their exports.

Related Article: Indian Business Press Trashes China's Electrical Grid Ambitions

The Pakistan Tanners Association Chairman M. Khurshid Ahmed wrote a blunt letter to authorities in Islamabad, said that losses of hundreds of millions of rupees feared in Tannery Zone in Korangi Industrial Area were caused by brownouts and blackouts due to electricity shortages at a critical time when the hide tanners are required to work full time due to a “high” season processing and tanning animal hides and skins. The glut of tannery raw material was caused by Eid ul Azha religious festival, which was celebrated on 26 October. Edi ul Azha celebrates the end of the Hajj, the annual pilgrimage to Mecca, for which many animals were sacrificed, but the Pakistani leather workers could not take advantage of the surplus of hides because of the power shortages.

Ahmed complained, “The power outages of 8 to more than 12 hours per day will ruin all the raw material lying at the tanneries worth millions of dollars and leather exporters will not be able to fulfill their commitment in the international market,” adding that the Karachi Electric Supply Co. should declare Tannery Zone exempted from blackouts.

The leather industry of Karachi contributes heavily to the national economy by providing jobs to about 80,000 people as well as bringing in foreign exchange of $1.4 billion from exports.

Annoying Pakistani citizens with blackouts is one thing, threatening exports is quite another. Alienating Pakistan’s Karachi Tannery Zone companies is a direct blow at the country’s foreign revenue exports, as over 200 leather industries are located in Karachi’s Tannery Zone, and the area contributes to over 40 percent of Pakistan’s total leather production, according to the Pakistan Tanners Association.

Related Article: US Power Grid Vulnerable to Just About Everything

So, how does Islamabad cope with the chronic electrical energy shortages?

Well, muddle through. Pakistan’s National Electric Power Regulatory Authority noted in a report that there is no short-term or interim long-term solution available to Pakistan’s energy crisis, and it could extend to 2020 if the situation remains unresolved.

So, who to blame?

NEPTRA reported that the nation’s power producers and distributing companies have failed to perform their duties effectively, but also raise the issue of corruption and theft, noting that line losses through siphoning off of electricity is badly damaging the country’s power sector, providing the shocking statistic that, while Pakistan has an installed capacity of 23,000 megawatts, even in peak demand season Pakistani power generation did not exceed 14,000 megawatts.

So, will outsiders help to rebuild Pakistan’s ramshackle and increasingly inadequate power system? Islamabad recently received a glimmer of hope when on 29 November U.S. Ambassador to Pakistan Richard Olson said during his visit to the country’s Mangla Dam hydroelectric facility. Olsen told reporters during a visit to the 1,000 megawatt facility, “The U.S. government’s assistance helped build Mangla Dam. Now, nearly 50 years later, the U.S. is helping to repair the Mangla power facility to make sure it continues to produce the energy this country needs.”

The U.S. aid is a start, but hardly enough, and, in the meantime, Pakistanis continue to suffer massive blackouts and the electrical shortages increasingly effect the country’s “bottom line” exports.

Revolutions have been started over less.

By. John C.K. Daly of Oilprice.com




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