ADB on RPPs

THE ADBs refusal to approve water and power ministrys 2250 MW electricity generation plan through 14 rental power projects on the ground that it would raise the tariffs by 45 percent and would require at least $5 billion for completion, which would greatly burden the national exchequer, is a real slap in the face of the governments strategy on the RPPs. Much to the chagrin of the federal water and power ministry, the ADB was selected as a third party to analyse the governments contracts with the RPPs. The honest assessment has exposed the Federal Minister Raja Pervez Ashraf, who had been telling a cock-and-bull story about the RPPs, presenting them as a panacea to the menace of load shedding. Now that the ADB has itself found the ministrys power programme to be full of flaws, the governments criticism of media and other quarters for trying to create a negative hype about the RPPs earlier would appear to be totally unjustified and baseless. So much so the government had started to say that its failure to meet the deadline for the elimination of loadshedding was because of the media, which had offered a stiff opposition to the RPPs ultimately delaying the projects. In this point in time, it stands to reason that the poor masses would not be able to afford this much expensive electricity. Already there has been an increase of almost 300 percent in tariffs during the past few months and raising them further by 45 percent would turn out to be a recipe for social unrest, intensifying the ongoing power riots. Since the RPPs are furnace oil based, they would greatly increase the countrys import bill by $1.2 billion per annum on account of oil supplies. What is more, the generators are old and worn out and there are fears that they might not be able to function properly. Now that the so-called trouble-shooters in the water and power ministry have been rightly rebuffed by the ABD, the governments only saving grace lay in the fact that rather than setting up rental power plants, it should explore other options to tackle the energy crisis. The bank has suggested that the Pakistan government must instead rely on the IPPs and hydroelectric projects to close the demand and supply gap. Comparatively speaking, there is not much difference in terms of the time required for ending loadshedding. While the rental programme for all its flaws and high cost would take one year to meet the existing demand, the second option of IPPs would take two years, the report says. Rather than further wasting time and dithering, the government must immediately gird up its loins to implement the ADBs suggestions in letter and in spirit.

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