Sharif faces race against time – Bid to end power crisis

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LAHORE/ISLAMABAD, Oct 12, (RTRS): In Abdul Aziz’s print shop, the daily blackouts that plunge him into darkness and silence his rolling presses are costly and chip away at his faith in Pakistani Prime Minister Nawaz Sharif. For nearly a decade, power shortages have hobbled the country’s economy and eaten into Aziz’s profits, preventing him from hiring more staff or expanding his family-owned business. Sharif swept to power in 2013 vowing to eradicate crippling outages that brought Pakistan’s $250 billion economy to its knees, but he now faces a race against time to stay true to his word before the next general election in 2018

Election
“If Nawaz Sharif ends (power shortages) by the election in 2018, we will vote for him again,” said Aziz, 40, who lives in Sharif’s constituency in Lahore, capital of Punjab province. “If he doesn’t, we will not.” Power supplies are not the only factor that will decide any poll. A further escalation in tensions with nucleararmed rival India could destabilise the government, as could Islamist militant violence or street protests. But Sharif has greater control over energy supply, and his government has spent billions of dollars building liquefied natural gas (LNG) plants, pipelines and dams, while private investors are financing wind and solar. A major coal and two small nuclear plants are also due to come online before Sharif’s term ends.

The power projects, coinciding with the biggest road building programme in Pakistan’s history, are central to Sharif’s strategy to win the 2018 poll by promoting infrastructure as evidence of economic progress. Pakistan’s sputtering economy has rebounded in recent years, helped by lower global oil prices and improved security.

Chinese companies are arriving in force after Beijing outlined plans in 2014 to invest $46 billion in road, rail and energy infrastructure linking western China with Pakistan’s Arabian Sea coast, with two-thirds of the money earmarked for energy. The drive to boost generation above 17,000 megawatts (MW) and plug a 6,000 MW deficit has already yielded some results. Shortages in big cities, which two years ago went without power for 12 hours a day, are down to about six hours.

Sharif vowed last month that all scheduled outages would end before the next election, likely to be in May, 2018. His office said generation would hit 26,000 MW, a 3,000 MW surplus. There are fears, including within Sharif’s own ruling PML-N party, that the room for error has shrunk to zero and the ambitious targets could be missed, especially after two big hydro projects were delayed. “There are a lot of moving parts with all these projects,” said one Western diplomat in Islamabad. “The government has a comprehensive plan, but obviously there is some nervousness about the timelines.”

Halting outages would breathe fresh life into Pakistan’s economy, which needs to expand above 6 percent per year to absorb new entrants into the job market from a fast-growing population of 190 million people. Economic growth hit 4.7 percent last July-June fiscal year, the fastest pace of expansion since 2008. Economists estimate energy shortages shave up to 2 percent off annual growth.

Energy
Some energy experts say Sharif’s electricity goals are within reach. The Asian Development Bank, lending Pakistan more than $1 billion to help alleviate the energy crisis, expects load shedding, or scheduled outages, will be eradicated by mid-2018.

Sharif’s opponents, however, say the government is so fixated on boosting power generation that it has ignored reforms, like privatising distribution companies, that would modernise the market and lower the cost of electricity. Many Pakistani businesses complain about the price of power.

Lahore barber Eijaz Ahmed, forced to down tools for several hours every day, fumes about spending up to 60 percent of his revenues on electricity. “I cannot spend money on my children’s education because I have to pay (expensive) electricity bills,” he said, as his staff sat idle, waiting for power to return. Fearing disruption by the unions around election time, the government has backed out of privatising 10 key power distribution companies, which are broadly inefficient, and will now list some of their shares on the Pakistan Stock Exchange.

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