ISLAMABAD, Nov 13: The World Bank has expressed concern over the huge accumulative losses of Wapda and the KESC and urged the government to work out a plan to overcome the growing power shortage in the country.
“One estimate places the annual financial losses of Wapda and KESC at about $585 million in the early years of this decade. The losses are increasing since Wapda’s losses alone were estimated at $817 million for financial year 2006,” it said.
According to a new World Bank study — Potential and Prospects for Regional Energy Trade in the South Asia Region —the two power utilities were also facing significant system and financial losses.
During the 10 years between 1996 and 2005, Wapda’s total system losses (including auxiliary consumption of generation plants, transmission and distribution losses) ranged between 24.13 per cent (the lowest in the period) in 1997 and 27.55 per cent (the highest in the period) in 1999.
KESC’s system losses ranged between 35.14 per cent in 1996 and 47.39 in 2003.
Theft of electricity and non-payment of bills were so rampant where the KESC was concerned that the army was called in to prevent theft and enforce collections.
Collection had been particularly difficult in the Federally Administrated Tribal Areas.
Tariffs have traditionally lagged behind costs of supply and both Wapda and KESC had been accumulating substantial losses despite periodic financial recovery packages.
The World Bank forecasts that gas demand in Pakistan would grow annually at the rate of 7 per cent over the next 25 to 30 years, while the supply shortfall would be about 4 per cent to 10 per cent till 2010, and thereafter widen to 20 per cent or more.
The bank also believes that Pakistan could become a major market for surplus energy from Iran and Turkmenistan.
India and Pakistan had a total annual gas consumption of the order of about 2.50 tcf (in 2006) divided approximately equally between them. Gas demand in India and Pakistan are forecast to grow annually at the rate of 8 per cent and 7 per cent respectively in the next 25 to 30 years.
The World Bank has projected that both India and Pakistan after inter-connection of their grids would create the full regional electricity and gas market serving a population of 1.5 billion people. This market would be one of the largest in the world, whose sheer size would make it easier to mitigate the various risks, bear external shocks, reduce costs, create additional and more profitable trading opportunities and attract investments.
The bank also said that power import from Iran to the Gwadar port area would increase from about 25 MW now to about 100 MW when the proposed 220 KV link was completed.
About hydropower import from Central Asia to Afghanistan and Pakistan, the bank said that the important project was being currently discussed and formulated with the help of multilateral and bilateral development partners led by the World Bank. It relates to the export of 1000 MW of power from Tajikistan and Kyrghyz Republic to Pakistan and Afghanistan.