AGAINST the backdrop of the prevalent energy crisis in Pakistan, the industrial sector of the country has a very important role to play.

The performance of the industrial sector with regards to the field of energy has not been enviable in any respect. Local industry has traditionally fallen short of making any noteworthy contribution towards efforts to tackle the country`s energy problems.

Although there have been some phenomenal success stories and examples of absolutely world-class projects, the overall outlook of the industrial base of the country is pretty grim. Among the major issues conventionally plaguing the sector are built-in passiveness and short sightedness. Often, small and medium enterprises (SMEs) count on technicians and foremen to lead their technical teams — the wider approach is that it would be a lot cheaper to hire a foreman than a qualified engineer.

Such a strategy has wider ramifications. A large section of the industrial base, lacking vision and understanding of contemporary challenges and prospects, has been relying on a copycat approach. In many crucial areas, such as metals and alloys, coatings and surface treatments, chemicals and synthetic materials, industry relies solely on conjecture. Concepts like innovative solutions, precision engineering, quality control and standardisation are unheard of. In an age of globalisation and a free economy, local industry is sharply losing the competitive edge.

It is time for the industrial sector to rise to the occasion. In order to address the country`s energy problems industry has a crucial role to play. It should take the energy sector on board as a prioritised business area. As of the last quarter of 2008, Pakistan is experiencing a shortfall of over 5000 MW of electricity. With demand consistently rising and taking $1.5m per megawatt as the benchmark figure, the country would require an investment of well over $15bn before 2015.

It is also worth noting that energy is one of the most lucrative businesses on the planet — power plants usually have a small payback period and earn enormous sums on the investment made. For local industrialists and investors, the time is ripe for stepping into the energy sector. It calls for wholehearted dynamism.

One of the major drawbacks of the energy sector is the fact that local industry does not have any expertise whatsoever in the area of energy technologies. It does not have a clue of how to produce fundamental energy components, i.e. turbines, engines and generators. The situation with secondary components such as compressors, heat exchangers and electronic circuitry is also far from being enviable.

Obviously in order to tap the immediate business opportunities, procurement of power plants from abroad is the only option — industrialists can make a fortune only through investment as well as through manufacturing. Amid numerous emerging new technologies, such as renewable energy systems, in the medium-term to long-term scenario the energy sector is going to experience a fast-changing and expanding business environment.

In order to be well positioned to tap future businessopportunities, local industry will need to overcome its complacency. Emphasis should be placed upon technology transfer and reverse engineering so that a few years down the line the country is capable of locally producing the desired level of energy systems. In the wake of the falling Pakistani rupee, rising freight charges and higher prices of materials, imports are becoming costlier. Options like technology transfer and reverse engineering thus require to be prioritised.

Here it is worth pointing out that India, having realised the importance of renewable energy, took timely initiatives a couple of decades ago and now has become a major exporter of renewable technologies, such as wind turbines and solar photovoltaic. Reports suggest that even Pakistan is in the process of purchasing some of these technologies. Interestingly, there is hardly any disparity between the two countries, especially in terms of per capita socio-economics and human resources calibre.

The only noticeable difference we find between the two is in the vision and commitment of their leadership. For example, Suzlon, the fifth-largest wind turbine manufacturing company in the world was established in 1995 by a textile businessman. The company is now worth nearly $2.2bn. India has managed to attract a number of leading solar photovoltaic manufacturers in the world and has set up a number of production facilities. Pakistan has once again been left behind and will be taking another late start as it did in the case of the IT industry.

Industrialists in Pakistan so far do not appear to be aware of the true potential of the energy sector. Consequently, a major chunk of the energy business, yielding gigantic sums of profit,

is going overseas every year. The hallmark example to quote here is that of the IPPs. It is never too late. All it requires is a visionary and a resolute start.

Here the government also needs to support the industry by making conducive policies not only in letter but also in spirit. The policies then also need to be truly implemented. For instance, one should not have to pay a heavy duty on imported renewable energy equipment if one refuses to meet the unjustified demands of relevant quarters since the recent renewable energy policy promised to exempt such equipment from import duties.n

The writer is a lecturer in renewable energy at the Glasgow Caledonian University, UK.



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