With some policy adjustments and tax incentives, the power crisis can be eased partially in industrial clusters. The immediate solutions can be worked out based on the utilisation of excess capacity of captive power plants.

Many companies own captive power plants that have capacities in excess of their immediate requirement. Besides, there are some closed down units in Karachi and a few cities of Punjab where small capacity power plants have become redundant and are lying idle.

“Currently, the law prohibits a private company from selling surplus electricity from captive power plants to any consumer directly, or to even transfer it to a sister concern. Imagine how convenient it would be to sell the surplus electricity to others in the same vicinity (with nominal transmission costs) who need it, if someone makes the government understand the benefit, which entails no public cost,” a businessman told Dawn.

“Some people are doing that already. It would be good if the system is streamlined and given legal coverage,” a businessman told this writer from Lahore.

“I have five units of 1MW at my factory in the Site area. For better part of a year, two to three generators remain idle. The factory in the adjacent plot needs back up, as its generators’ capacity is less than its requirement.

“When I approached the KESC, I was told that if I wish, I could sell the excess electricity to the national grid after necessary documentation. The gain was too little to justify the pain of dealing with high headed corrupt officials,” a former chairman of the All Pakistan Textile Mills Association (Aptcma) told this scribe.

When contacted, official circles in Lahore and Islamabad did not shoot down the suggestion, but counted a number of overlapping issues. “Though it is not as simple as the businessmen make it sound, we are ready to work on it. Ask the business community to send their proposals in writing,” a senior officer said.

“I can assure you that the government means business. The relevant ministries and departments are under tremendous pressure and are ready to pounce on any out-of-the-box solutions for immediate relief from electricity shortage,” a top man in the power hierarchy told Dawn.

A senior officer of the National Electric Power Regulatory Authority (Nepra) termed the observation of the former chairman Aptma incorrect.

“The distribution companies (discos) enjoy area exclusivity under the terms of the deal, so we cannot allow people to sell directly to consumers in many areas covered by discos. But in areas outside their coverage, such a facility is permissible under the law. Yes, the interested party needs to apply for a licence to acquire the right,” he explained.

Scanning the Nepra website confirmed that only one company in the country — Engro Chemical Pakistan — was licensed (in 2009) for distribution of electricity.

A 15-page document on licensing lists all the details on the subject.

Zawar Haider Kazmi, a senior officer in the Nepra’s licensing department, defended Nepra and its policies by referring to Regulation 3 sub regulation 5A and Regulation

2 sub regulation 1K of the Regulation of Generation, Transmission and Distribution of Electric Power Act 1997.

Imtiaz Baloch, another officer, informed about a new Nepra initiative. “To address the issue of power deficit in sister concerns of units that have excess capacity of captive power plants, we have introduced the ‘wheeling scheme’.

“Under the scheme, if unit X passes on surplus capacity to the national grid, Nepra will provide the same amount to the sister concern at any destination anywhere in Pakistan,” he told Dawn over telephone from Islamabad.

Officials at the head office of the Water and Power Development Authority (Wapda) in Lahore and Nepra in Islamabad did not have any data readily available in this regard. They did not, however, rule out the existence of power generation capacity in the private sector outside their monitoring radar or direct domain.

“It would be great if the government amends the rules, cuts lengthy processes short, provides a window of at least three years to businesses, facilitates direct selling of electricity to buyers, and makes the scheme appear attractive for captive power plant owners by offering tax incentives,” commented Rafique Ibrahim, chairman of Orient Textiles.

He, however, expressed apprehensions over consistency of policies, which businessmen feel tends to change abruptly. “Once you start to roll the ball, it becomes very hard if the rules of the game change,” Ibrahim said.

According to an expert’s guess, the central grid can get a relief of five to seven per cent if the private and the public sector partner to deal with the issue of power shortages in industrial areas to sustain the trend of rise in manufacturing activity.

The rise in generation capacity by 900MW is not sufficient to match the yawning demand-supply gap currently projected at 1,200MW.