The PML-N government came to power with a ‘heavy mandate in 2013 but it remained one of the most unstable and fragile regimes in Pakistan. What has sustained the regime is the domination of non-issues braced and hyped by the opposition parties who have no real differences on the basic economic and class policies of the Nawaz regime. This government from inception was plagued by the long and sustained electricity outages and a soaring demand increasing at a rate of 10 per cent annually. This in turn has been provoking mass protests and now is actually posing an existential threat to Sharif’s government.
However, these mass protests have been sporadic and occasional. The government has been able to pump in more electricity temporarily to dissipate the outbursts with its makeshift measures that cannot provide a lasting solution to the anguish of load shedding and sustained power supply for the needs of society.
The elephant in the room is the privatisation of electric generation and supply in the last three decades and rocketing of the tariff prices.
The drastic shift towards the private sector power generation began in the 1990s when the second Benazir government opened up the sector to imperialist private power producers, the IPPs. The Nawaz Sharif, Musharraf and subsequent regimes continued the policy with their own capitalist protégés getting access to this cruel extortion from an impoverished people.
A Financial Times article probed this privatisation, “In Pakistan’s IPPs agreements(the government) guaranteed a 12 to 15 per cent annual return (indexed in dollars, not rupees), gave tax breaks and paid interest on private funding — more expensive for the government than providing the funding itself. The deal was too good to be true for investors. Most private investors chose to build oil-powered plants because of their low construction costs and short lead times. Variable costs, and therefore prices to consumers, are at unsustainable levels. No wonder many consumers can’t afford to pay their bills.”
The deals signed were patently in favour of these corporate vultures that paid hefty kickbacks to the politicians and generals in power to extract these contracts. Successive regimes guaranteed these investors too much capacity to be built and assured them of the same return by the Pakistani state exchequer on that extra capacity, whether it was used or not. The ruling classes are corrupt and stashing away their obscene wealth through such deals while further impoverishing the masses and burdening the state with massive debts from the World Bank and the IMF in this process. Pakistan’s circular debt is only getting worse because of rising interest costs and dollar-rupee appreciation.
The elephant in the room is privatisation of electricity generation and supply and subsequent surge in tariffs
In a capitalist system there is no way-out from this quandary. The IPPs often start shutting down power plants, darkening Pakistan’s oppressed masses. Ordinary people have to endure daily power outages in spite of the country having an excess generating capacity of almost 35 per cent. Pakistan has some of the highest power prices in the region, at $0.13 per unit of electricity, compared with $0.12 in India, $0.11 in China and $0.09 in Bangladesh. Furnace oil is burnt to produce 40 per cent of the supply, with hydroelectric dams accounting for 30 per cent and gas 25 per cent.
The obsolete and decayed condition of the distribution infrastructure is barely able to cope with the existing power generation. Transmission lines, cables and transformation copper parts are decrepit with neither the will nor the financial capacity of the various capitalist regimes to execute adequate upgrading, repair and maintenance. Even in the metropolitan areas the transformers are over-loaded and frequently burst with little or no maintenance by the cash-strapped state owned distributors.
Such is the debilitated condition of the transmission infrastructure that even the private sector is reluctant to invest. The overstated CPEC concentration is mainly on power generation projects rather than the transmission lines. The Chinese corporate investors are not here to provide cheap and reliable electricity supply but to extract higher rates of profits. Even with all this din of development through CPEC, there is no new infrastructure initiative planned to transmit power to energy-starved Balochistan that currently does not have the capacity to bear electricity transmission beyond 500MW. It’s another manifestation of the distorted and uneven pattern of industrial and economic development of capitalism in Pakistan that the timelines of power generation and transmission have not been coordinated effectively.
It is true that Pakistan needs more electricity generation from low cost fossil fuels like natural gas and coal instead of relying on furnace oil and diesel that have been responsible for the so-called circular debt in the power sector in the recent years and becomes a drain on national economy. But electricity like all other businesses in this system is generated for profits, not for the accomplishment of society’s needs.
Profits and kickbacks for the bankers, bureaucrats, foreign and local investors, politicians and military’s enterprises can only be guaranteed within the confines of this system of coercion and disparity. For the society to have access to cheap and efficient electricity supply, the power generation system, banking and financial institutions have to be expropriated by the state. But the replacement of this chaotic market economy with a socialist planned economy needs a revolutionary transformation.
The writer is the editor of Asian Marxist Review and International Secretary of Pakistan Trade Union Defence Campaign. He can be reached at [email protected]