Justin Joseph
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Energy crisis has crippled economy: Hafeez Shaikh
Tuesday April 20, 2010 (1205 PST)
ISLAMABAD: Adviser to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh said here on Monday that the IMF had sought guarantees that the World Bank and the Asian Development Bank would not derail the planned lending of $900 million for Pakistan in case of non-implementation of the agreed six per cent hike in power tariff from April 2010.
The lending of $900 million from the WB and the ADB is part of the financing plan carved out by the IMF for Pakistan. So, the Fund is asking us to get assurance from the donors that the money will remain intact, Shaikh told reporters after inaugurating the newly-constructed block of the NUST Business School (NBS).
When he was asked whether the government reached a consensus with the donors for jacking up the power tariff by 6.75 per cent by end June instead of six per cent from April, the adviser preferred not to reply directly. He, however, said the IMF and the donors wanted to implement the agreed tariff formula, but in case Islamabad did not want to raise the tariff immediately, then it would have to convince the WB and ADB on it.
He said Pakistan had entered into an agreement with the WB and the ADB for increasing the power tariff in three phases, i.e. six per cent in October 2009, 12 per cent in January 2010 and again six per cent in April 2010, out of which, the first two phases were already implemented.
If we dont want to further burden our masses, then we will have to find out ways and means to fill the gap between the international prices of fuel and the generation cost, he said, adding that there was also the need for bringing efficiency for improving the health of the power sector, otherwise, the budgetary resources would have to be shifted for filling the gap of cash bleeding of this sector.
He said the donors wanted to cooperate with Pakistan, but at the same time, they were asking for a strategy to come out of the energy crisis. Answering a query about the implementation of the Value Added Tax from the next fiscal, he said the government would strive to take all the stakeholders into confidence.
Earlier, delivering a lecture to the NBS students, Shaikh dwelt upon six-pronged strategy for resolving the energy crisis. He conceded that there was an idle capacity of 1,250 MW in the country as there was 950 MW capacity available alone at one site and because of gas shortage, around 950 MW could not be generated.
Pakistan News Service - PakTribune
This is sheer wastage, they have capacity but is idle, around 1000 MW will cut the power shortage by around 30%. Instead of building new power plants first they should ensure the supply of raw materials.
Why waste hard earned money of people in building idle capacities? After all building power plants that too 1000 MW is not cheap.
Tuesday April 20, 2010 (1205 PST)
ISLAMABAD: Adviser to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh said here on Monday that the IMF had sought guarantees that the World Bank and the Asian Development Bank would not derail the planned lending of $900 million for Pakistan in case of non-implementation of the agreed six per cent hike in power tariff from April 2010.
The lending of $900 million from the WB and the ADB is part of the financing plan carved out by the IMF for Pakistan. So, the Fund is asking us to get assurance from the donors that the money will remain intact, Shaikh told reporters after inaugurating the newly-constructed block of the NUST Business School (NBS).
When he was asked whether the government reached a consensus with the donors for jacking up the power tariff by 6.75 per cent by end June instead of six per cent from April, the adviser preferred not to reply directly. He, however, said the IMF and the donors wanted to implement the agreed tariff formula, but in case Islamabad did not want to raise the tariff immediately, then it would have to convince the WB and ADB on it.
He said Pakistan had entered into an agreement with the WB and the ADB for increasing the power tariff in three phases, i.e. six per cent in October 2009, 12 per cent in January 2010 and again six per cent in April 2010, out of which, the first two phases were already implemented.
If we dont want to further burden our masses, then we will have to find out ways and means to fill the gap between the international prices of fuel and the generation cost, he said, adding that there was also the need for bringing efficiency for improving the health of the power sector, otherwise, the budgetary resources would have to be shifted for filling the gap of cash bleeding of this sector.
He said the donors wanted to cooperate with Pakistan, but at the same time, they were asking for a strategy to come out of the energy crisis. Answering a query about the implementation of the Value Added Tax from the next fiscal, he said the government would strive to take all the stakeholders into confidence.
Earlier, delivering a lecture to the NBS students, Shaikh dwelt upon six-pronged strategy for resolving the energy crisis. He conceded that there was an idle capacity of 1,250 MW in the country as there was 950 MW capacity available alone at one site and because of gas shortage, around 950 MW could not be generated.
Pakistan News Service - PakTribune
This is sheer wastage, they have capacity but is idle, around 1000 MW will cut the power shortage by around 30%. Instead of building new power plants first they should ensure the supply of raw materials.
Why waste hard earned money of people in building idle capacities? After all building power plants that too 1000 MW is not cheap.
