WHEN you ask the top policy makers why in all these seven years of their rule they had failed to add even one single extra MW of power to the installed generating capacity that had existed in 1999, their response is: We had surplus power of 1500MW which at an annual average growth rate of six per cent in demand was projected to be more than enough to cater for our needs until 2005.

But one finds that the projected optimistic scenario of the Wapda had not accompanied any alternative scenarios adjusting for variables like drop in hydro capacity due to water shortages or decrease in thermal capacity because of fall in gas supplies. The outcome is massive country-wide power loading shedding.

Why the Wapda did not make these not so happy alternative projections as well which is what an efficient organization does to be able to make contingency plans and get rolling in time to meet unforeseen crises, is not very clear. And why the government did not ask for such alternative scenarios from Wapda is still more intriguing.

The optimistic Wapda projection was based on availability of hydro power as per average of previous years. However, from the very fist year of the present millennium water availability in Tarbela and Mangla Dams had started going down drastically as the country entered a three-year cycle of drought. And meanwhile the gas supply had also gone down drastically. And by 2001, the surplus had turned into a shortfall of around 300MW.

So, the alarm bells had started ringing very early in the day. But the government which had stopped seeing the trees because of the forest had appeared at that time to be more concerned about controlling the budgetary deficit rather than the emerging shortages of a strategic input for the economy.

The best options available then for the government was to have quickly established a couple of new thermal projects with a gestation periods of 2-3 years, launch a big hydro power project and lure foreign investors to Lakhra coal mines for setting up fair sized power projects that do not cause yellow rain. Instead, the government went chasing the shadows.

And now after having wasted all these years, the government has at last awarded contracts to four private companies to set up diesel and gas fired power plants of a total capacity of 1000MW whose average unit price is estimated to be at least about 40 per cent higher than what it would have been if such plants had been launched in 2002 when the alarm bells had started ringing. And this unit price is certainly much higher than that which the original IPPs were offered in 1996.

And instead of launching the work on a non-controversial large power-cum-irrigation dam immediately, the government wasted almost about six years trying to force a national consensus on the controversial Kalabagh Dam.

A bitter and highly divisive debate on Kalabagh Dam had ensued immediately after the then military government of General Ziaul Haq had announced its intention in 1986 to launch it by the following year. And by 1996, it had become crystal clear that any further debate on the matter would only end up wasting precious time and pushing up the opportunity cost. Still, Mr Nawaz Sharif at the fag end of his second government made a last ditch effort to cobble up a consensus on the project, but without any success.

So, there was no need for any further debate on the issue. But the present regime re-opened the contentious debate once again and constituted a number of committees and commissions to prepare reports on the advantages and disadvantages of constructing the Kalabagh Dam.

Incidentally, all these reports came up with the conclusion that the best technical and political option at the moment was to take in hand immediately the Diamir Bhasha Dam and keep Kalabagh for some future date.

But attempts were made to keep these reports suppressed while efforts were redoubled to impose a consensus on Kalabagh. It was only late last year that the government finally accepted the inevitable and announced that it has at last decided to launch the Diamir Bhahsa dam project. What a waste of time and economic opportunity!

The coal option has been tackled only half heartedly so far. It took the government a long time to make up its mind as to which foreign source should be tapped to get the coal-fired power project off the ground.

And finally when the load shedding was almost on our heads, the project was given to an American firm for commissioning coal-fired 1000MW power station. Also, the Fatteh Group of Hyderabad (250MW) and the China National Chemical Engineering Group (250MW) are now engaged in setting up coal-fired power plants.

All these projects appear to be non-starters as of today. And also one often hears about a government decision to establish a coal mining and power generation company on the pattern of Wapda for harnessing Thar coal resources. So far, this decision is still in the files.

So much about the government’s claim on the current massive countrywide load-shedding of power. Now let us examine its claims on poverty and unemployment in the light of observations by an independent research organization like Social Policy and Development Centre (SPDC). Its says:

“The GOP has declared a reduction of more than 10 percentage points in the poverty incidence over the 2001-2005 period based on the new household survey…. If the government figures are to be believed, this would be a phenomenal reduction in poverty over a period of just four years and a major international success story… However, many among the researchers, the media and the public at large remain unconvinced and skeptical about the accuracy of the latest data on poverty.”

The SPDC cites the rising trends in inflation (especially food prices), unemployment and level of inequality as factors that have tended to increase poverty and prevented the benefits of high growth from trickling down adequately to the poor segments of society.

The government’s claim that its poverty figures have been endorsed by the multilateral aid agencies is also correct. These agencies have endorsed these figures because they have used the same methodology and data settings as those by the government. This way they could not have reached any other conclusion.

But many independent researchers have expressed skepticism on the ‘internal price indices’ provided in the data settings used by the government and believe that if genuine CPI had been used, the poverty reduction figure in the four-year period would not have gone down beyond five per cent.

“Poverty figures can be very sensitive to the exact methodology used and, therefore, the real situation is difficult to assess, especially without having access to the detailed data of Pakistan social and living-standards measurement (PSLM) Survey 2004,” observes the SPDC paper. But then why hasn’t the government released the details of the survey so far?

The SPDC paper also shows a large difference (almost four-fold) in the growth rates between the consumption of the richest 20 per cent of the population and the poorest 20 per cent. This according to the paper ‘strongly suggests a worsening income distribution.”

According to analysis in the latest Pakistan Economic Survey, from FY04 to December 05, 5.82 million new jobs have been created. Further scrutiny reveals, however, that this appears to be largely a rural phenomenon, with 78 per cent of the new jobs being created in rural areas. This, the SPDC says, seems implausible.

Additionally, it says, changes in the sectoral distribution of the employed labour force indicate a rising share in the agriculture sector and a declining share of trade and services. According to the SPDC, this is surprising given that trade and services have been the sectors where economic activity has expanded the most.