Energy sector privatisation creating uncertainties: study
ISLAMABAD (June 12 2007): The Planning Commission (PC) has observed that the ongoing privatisation and market liberalisation in energy sector are creating uncertainties, limiting most of the country's population access to modern energy services.
"To meet the energy demand would be the biggest challenge in the country, where the government is striving to ensure that GDP grows at over 7 percent a year," the PC said in its detailed study on energy.
According to the study, the ministries of water and power petroleum and natural resources have failed to meet their development targets in 2006-07, citing lack of funds and deteriorating law and order situation in Balochistan as the main reasons.
The failure of the two ministries and as a whole of the government came at a time when the country is facing acute power shortage and the electricity outages are taking place across the country, a government official told Business Recorder.
For the fiscal year 2006-07, an amount of Rs 60.5 billion was allocated for the power sub-sector. The allocation included the budgetary allocations for corporations. Against the above allocations, the revised estimates were Rs 53.08 billion, which were 81 percent of the total allocation. The main reason for low utilisation of fund was non-availability of local as well as foreign aid for some of the development projects of Water and Power Development Authority (Wapda), said the official.
During last two financial years, the country had been facing acute power shortage, and there was only partial success in the power policies and projects, according to the PC. Major achievement by the power sector was the privatisation of Karachi Electric Supply Corporation (KESC) in 2005. The other important achievement was energy import from Iran to meet power requirements of coastal areas of Balochistan, said the PC.
In fuel sector, an allocation of Rs 931 million was made during 2006-07 excluding non-budgetary corporation programme. Against the above allocation, the revised estimates were 823 million, showing 88 percent utilisation. The reason of shortfall was the law and order situation in Balochistan, which slowed down the implementation of the projects, especially the oil and gas exploration in Balochistan-opening of exploration activities in Tribal areas commenced in the last quarter of the current fiscal year, according to the PC.
In oil and gas exploration, a total of 80 wells, both in public and private sectors (52 exploratory and 28 development/appraisal wells), are expected to be drilled by the end of this fiscal year against the target of 100 wells. Eight oil and gas discoveries, four in public and four in private sector, have so far been made.
Historically, the country has been subjected to energy demand suppuration due to limited supplies and lack of adequate infrastructure for provision of energy to the expanding economy. The lack of sustained and affordable energy supply has restrained economic and social growth, slowing down the investment in the country, the PC said.
"To meet the energy demand would be the biggest challenge in the country, where the government is striving to ensure that GDP grows at over 7 percent a year," the PC said in its detailed study on energy.
According to the study, the ministries of water and power petroleum and natural resources have failed to meet their development targets in 2006-07, citing lack of funds and deteriorating law and order situation in Balochistan as the main reasons.
The failure of the two ministries and as a whole of the government came at a time when the country is facing acute power shortage and the electricity outages are taking place across the country, a government official told Business Recorder.
For the fiscal year 2006-07, an amount of Rs 60.5 billion was allocated for the power sub-sector. The allocation included the budgetary allocations for corporations. Against the above allocations, the revised estimates were Rs 53.08 billion, which were 81 percent of the total allocation. The main reason for low utilisation of fund was non-availability of local as well as foreign aid for some of the development projects of Water and Power Development Authority (Wapda), said the official.
During last two financial years, the country had been facing acute power shortage, and there was only partial success in the power policies and projects, according to the PC. Major achievement by the power sector was the privatisation of Karachi Electric Supply Corporation (KESC) in 2005. The other important achievement was energy import from Iran to meet power requirements of coastal areas of Balochistan, said the PC.
In fuel sector, an allocation of Rs 931 million was made during 2006-07 excluding non-budgetary corporation programme. Against the above allocation, the revised estimates were 823 million, showing 88 percent utilisation. The reason of shortfall was the law and order situation in Balochistan, which slowed down the implementation of the projects, especially the oil and gas exploration in Balochistan-opening of exploration activities in Tribal areas commenced in the last quarter of the current fiscal year, according to the PC.
In oil and gas exploration, a total of 80 wells, both in public and private sectors (52 exploratory and 28 development/appraisal wells), are expected to be drilled by the end of this fiscal year against the target of 100 wells. Eight oil and gas discoveries, four in public and four in private sector, have so far been made.
Historically, the country has been subjected to energy demand suppuration due to limited supplies and lack of adequate infrastructure for provision of energy to the expanding economy. The lack of sustained and affordable energy supply has restrained economic and social growth, slowing down the investment in the country, the PC said.
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