Just to end the 3rd term PM Restriction PMLN Signs 18th Amendment without thinking its effect on Energy Crisis in PUNJAB When Lights go Out (18th Amendment Energy Crisis and Punjab Gov Role) By Sayem Ali How did President Zardari and his coalition allies make the national energy crisis a Punjab-targeted problem? Why did the Punjab government led by former provincial chief minister Shahbaz Sharif and PML-N vote in favour of the parliamentary amendment that imposed this injustice to Punjab? On the third anniversary of the 18th Amendment, the people of Punjab are up in arms against the crippling power crisis, which has crippled the industry and led to record unemployment in Punjab. According to the latest official data, the energy shortfall in Punjab stands at 3,300 MW in 2013, which alone accounts for 83 percent of the total national power deficit of 4,400 MW. This was not always the case as the energy shortfall burden on Punjab in 2007 was significantly less at 60 percent of the national shortfall. Gas shortfall to Punjab has also increased five folds in the last five years to 700 million cubic feet per day (mmcfd), which is almost 60 percent of the total gas shortfall in Pakistan today. It used to be only 134 mmcfd or 30 percent of the total national gas shortfall in 2007. The 18th Amendment states that ‘the province in which a well-head of natural gas is situated shall have precedence over other parts of Pakistan’. Punjab is an energy- deficient province and accounts for only five percent of Pakistan’s total annual production of 4.3 billion cubic feet per day (BCFD). Sindh is the largest gas producing province with a 57 percent share, followed by Balochistan with 20 percent and Khyber Paktunkhwa (KP) produces 18 percent. Hence, as a direct result of the 18th Amendment the gas supply to Punjab was slashed drastically and shortfall jumped five folds. Sharp reduction of gas to Punjab also badly impacted the generation capacity of power plants run by generation companies and IPPs. As a result, power generation in Punjab dipped sharply by 14 percent to 4,200 MW in 2011, down from 5,000 MW in 2007. Punjab’s share in electricity supply from the national grid also dipped as other provinces got preference. So, when the parliament approved the 18th Amendment, did they not know that all hell will break loose on the people of Punjab? Why would President Zardari care that gas supply to the industries in Punjab remained shut for three whole months from December to February? Why would Asfandyar Wali care that CNG stations in Punjab remained shut for over five days, after all KP gets CNG seven days a week? Punjab is not their headache. The party that was expected to safeguard the interests of the people of Punjab was the PML-N. Shabaz Sharif has thundered away that Ali Baba and the 40 chors have stolen Punjab’s power. He is absolutely right. But what he forgets to mention is that it would have been impossible for President Zardari and allies to con the people of Punjab without PML-N’s help in passing the 18th Amendment. All 106 parliamentarians from the PML-N voted unanimously to pass this resolution. Was it not the Punjab government’s responsibility to safeguard the energy security of the province? The very least the PML-N could have fought for was to give the industry in Punjab a cushion of three years to seek alternative arrangements to meet their energy requirement. An agreement similar to the seventh NFC award would have shielded the industry and the people of Punjab from this unending nightmare of no gas and no electricity. In the NFC award, the federal government transferred a higher share of taxes collected to provinces but phased out over a three-year period. But no such provision was made in the 18th Amendment and hence the energy crisis in Punjab has magnified every year and the industries have started to shut down with unemployment reaching record levels. According to the latest Pakistan Bureau of Statistics Labour survey, there were over 2,100,000 unemployed youth in Punjab in 2011, a sharp increase of nearly 500,000 since 2007. Such a sharp rise in unemployment has never been witnessed before in Pakistan’s history. On average, an industry in Punjab has been forced to shut down for nearly 170 days a year due to chronic power and energy shortfall. The textile sector accounts for nearly 38 percent of Punjab’s industrial labour force and is today operating at only 60 percent of the total capacity. This has led to a loss of one million jobs in this sector alone since 2007. Despite the crippling energy crisis, the Punjab government spent less than one percent of its annual budget on resolving the issue in the last three years. This is an inexplicable story of neglect by the Punjab government. Only Rs10 billion was allocated by the Punjab government in the Rs964 billion budget of FY12, out of which a third was spent on Shahbaz Sharif’s solar lamp project. Not a single power generation project has been initiated by the Punjab government in the last five years and not a single megawatt of electricity has been produced. Shahbaz Sharif blamed the PPP government for failing to end the energy crisis. This is a lie. Not only does the Punjab government have full powers to set up power generation plants across Punjab, but it also had the money to do it. Under the seventh NFC award, the share of Punjab in the federal divisible tax pool increased to Rs518 billion in FY12 from Rs191 billion in FY07. Yet despite receiving this bonanza, the Punjab government made no effort to deal with the energy crisis. The helplessness of the Punjab government has been largely self-imposed. The 2002 Power Generation Policy allows provinces ‘to develop projects in public and private sectors at the least cost to utilise the available natural resources for power generation and to avoid capacity shortfall’. The Punjab government approved the 2006 Power Generation Policy, developing a one-window operation to attract investors to develop and implement power generation projects up to a maximum capacity of 50 MW. The 18th Amendment provides further powers to the provinces to not only set up generation projects, but also to establish their own transmission and distribution companies. Even the power to levy tax and determine tariffs for distribution have been devolved to the provinces. So, why has the Punjab government made no progress in dealing with the crisis? The neglect demonstrated by the former PPP government in the centre and Nawaz Sharif’s PML-N government in Punjab to resolve the energy crisis has put at stake the future of millions of youth in Punjab. Not only is the quality of life in Punjab falling behind other provinces, it is also declining behind the poorest of Sub-Saharan African states. Industrial shutdown and record unemployment is the reason why average incomes in Punjab have increased by only 0.4 percent in the last five years – the lowest levels ever recorded. This is significantly less than the average increase in per capita incomes in the rest of the country, which increased by nearly 1.4 percent during the same period. Malnourishment in children has increased alarmingly in Punjab. According to the National Nutrition Survey in 2011, nearly 39 percent of the children were found too short in terms of height, 30 percent were underweight and 14 percent were diagnosed to be suffering from acute malnutrition. This is significantly more than the rest of Pakistan and even worse than the Sub Saharan African states. The Punjab Millennium Development Goals report, jointly produced by the UNDP and the Punjab government, shows that over 6.8 million of the population across Punjab did not have access to clean drinking water in 2011, a sharp increase from 3.5 million in 2008. Similarly, the infant mortality rate increased to 82 deaths per 1,000 births in 2011, a sharp rise from 77 in 2008. That means 523 children die every single day, 365 days a year in Punjab due to lack of proper health facilities. A child born in Ethiopia, Rwanda, Sudan and Zimbabwe has a much better chance of survival. The power crisis in Punjab has now reached epic proportions and is set to get a whole lot worse in the medium term. The criminal negligence of President Zardari’s PPP-led government in managing the crisis is well documented in the Supreme Court ruling on the rental power projects. The people of Punjab must also hold accountable Nawaz Sharif and his Punjab government over their role in supporting the PPP in the 18th Amendment, which effectively has robbed Punjab of gas and energy supply. Next time the lights go out, make sure that all those well wishes are generously shared amongst all leaders responsible for taking us back to the stone age. The writer is an international economic policy expert.
Posted on: Fri, 07 Jun 2013 01:01:36 +0000
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