DAWN - Features; June 10, 2007

Published June 10, 2007

Budget documents belie CM’s claim

By Shakeel Ahmad

THE south Punjab could find an allocation of only Rs25 billion out of Rs300 billion announced for annual development programmes by the Punjab government during its last four budgets. Budget documents also belie tall claims of Punjab Chief Minister Pervaiz Elahi of allocating Rs60 billion for development projects in south Punjab during the period.

Everyone from president and prime minister to federal or provincial ministers had drawn a long bow for the initiation of various uplift projects in south Punjab, but on the ground situation remained hopeless during the regime of present rulers.

In his first visit to Multan after assuming the chief minister’s office, Pervaiz Elahi had declared to establish a state-of-the-art District Headquarters Hospital at a cost of Rs1 billion, but the project could not move ahead beyond acquisition of land.

Sheikh Zayed Medical College in Rahim Yar Khan, established in March 2003, is still running in the old building besides being under-staffed. The Multan Institute of Cardiology (MIC), set up with the aim to provide modern cardiac care facilities to the people in south Punjab, could not be made fully functional even after four years of its inauguration on account of funds shortage.

Similarly, the government has failed to buy land for southern and northern bypasses of Multan even after the passage of two years.

The Women University and Home Economics College for Women, Multan, are running in two rooms each of the Government Degree College for Women.

The Asian Development Bank had provided Rs2.25 billion for the uplift schemes in Multan and Rs5.25 billion for 21 backward tehsils of south Punjab in 2002, but half of the projects have still not been completed. During the last four years, the development work in Fort Munro, Fort Drawar and Lal Sohanra could find place only in the paperwork. At least Rs60 million had been set aside for the renovation of the Multan Fort some three years ago, but not a single penny has so far been spent on it.

Neither the federal nor the Punjab government has taken any step for the industrial development in Bahawalpur and Dera Ghazi Khan regions while the situation in the Multan Industrial Estate is not different either.

The government has also failed to construct a new district jail building in Multan despite the acquisition of the land for the purpose way back in 1984. The amount allocated for the establishment of housing schemes for the people of low-income group in Lodhran and Multan has still not been released.

A three-year project of Rs470 million had been approved for the upgradation of the DHQ Hospital, Dera Ghazi Khan, in the fiscal budget of 2004-05, but so far only Rs10 million could be spent on it.

Dr Javed Ahmed Siddiqi, the PPP MPA, said that the chief minister always quoted in his speeches that Rs60 billion had been allocated for uplift projects in south Punjab during the last four years, but the budget books mentioned the amount no more than Rs25 billion.

Growing debts of KESC

By Maheen A. Rashdi

The situation is well beyond damage control within the Karachi Electric Supply Corporation. Riots have reached a level where suffering citizens are past rationalising the reasons for power failure and have adopted violence as the only recourse. If help does not come soon, Karachi will be pushed towards a state of emergency. The government avoided imposing emergency in Karachi on May 12, but the power crisis is reaching a point where extreme measures might soon become inevitable as half the city remains disabled on a daily basis because of disrupted electricity supply and rioting citizens.

No help can be expected from the Water and Power Development Authority as the federal minister for water and power, Liaquat Jatoi, conceded a couple of months ago that Wapda was not within his control. And instead of resigning, he is still holding that crucial office.

There are reports that the Arab owners – the Al Jumaih group – have already liquidated their KESC shares to recover their cost and, hence, have relieved themselves of all their monetary concerns and in turn the concern of the consumers. The promised investment of $400-800 million to be made by the new owners never came through either. Furthermore, if accounts of insiders are to be believed, the KESC might become bankrupt soon. It is currently running into a monthly loss of over Rs1.5 billion. It had already declared losses worth Rs14.45 billion in its last annual report – an increase of 115 per cent from the previous fiscal.

The present loans acquired from ADB and IFC worth $150 million and $125 million, respectively, might give the impression that an infrastructure improvement is being made, but the bitter truth is that the company is being pushed deeper into debts, which will be recovered from the consumers who are getting nothing in return.

The KESC is said to own 19 open plots of various sizes in different parts of the city besides 366 buildings of assorted sizes and types, which include residential quarters of employees, and which have an estimated worth of Rs50 billion.

According to insiders, all documents of these properties have been taken away from the head office of KESC by new members within the management. A senior shareholder has voiced the possibility of these properties having been mortgaged to obtain loans to meet the shortfall in revenue, thus putting further financial burden on the Corporation.

Where is all the loan money going? The citizens have a right to ask the question since they will be repaying them through their electricity bills. As stated numerous times before, no infrastructure survey or subsequent development has been undertaken by its operations and management partners, Siemens, who are directly accountable for the present poor performance of KESC. Repair work on the Bin Qasim power plant is being done by Siemens since they took over, but the inefficiency is obvious since the different units keep breaking down almost every day – the root cause for hours of power breakdown. What kind of professionals have been employed here to carry out repairs which never get done?

There is no accountability in the post-privatization set-up of KESC. Siemens is tightly protected by its agreement through which they will still be paid the astronomical sum of $9-8 billion even if their delivery is zero, which is the current case. And in the process millions of Karachiites continue to suffer.

The manpower which was running KESC before privatization has been totally sidelined and so, all the senior chief engineers heading the generation, transmission and distribution departments who had the know-how have been kept out of commission. These were the people who were still managing to provide services despite having a dilapidated infrastructure and a ban on investment for new equipment as they knew how to keep the system running. While their salaries were at a maximum of Rs50,000 - Rs60,000, the new managers inducted have been given salaries up to a million rupees.

The new CEO, S. M. Amjad, a retired general, draws a salary of Rs1.1 million besides perks amounting to Rs0.3million. His appointment was made outside proper procedure on the recommendation of the Board of Directors and he has no credentials to prove that he possesses technical know-how of running such a sensitive outfit.

While its performance wasn’t an exemplary one before privatisation, there is no doubt that post privatisation, the slide has not only been drastic but critically damaging. The process of privatisation itself has severe critics on the inside as well as on the outside who allege that it was through the prime minister’s orders that such a poor deal was made and there were many vested reasons to include the operations and management contractors on the terms which were detrimental to KESC’s well-being from the outset. The situation now demands that the government rectifies its mistake with immediate effect and save the company and in turn the suffering of the 16 million consumers by revoking all existing contracts, taking back the management and operations of the company from the current owners. With the loan acquired recently, the best that can be done is that its processing be monitored and channelised towards development under professional expertise. Since the electricity situation is one human concern that the president is also anxious about, this is perhaps a good time to turn the electricity crisis around in Karachi and ensure a solid vote bank which is fast dwindling.


© DAWN Group of Newspapers, 2007



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