THE NEWS
Sunday, February 07, 2010
By our correspondent
LAHORE: Pakistan is fast becoming a desert because of a drastic fall in water availability from 5,000 cubic metres per capita in the 1950s to 1,000 cubic metres in 2010.
Lahore Chamber of Commerce and Industry’s former vice president Shahzad Ali Malik said this in a presentation to US Consulate’s Economic and Political Adviser Richard C Jao.
LCCI Vice President Faisal Iqbal Sheikh, Executive Committee members and former Lahore Chamber of Commerce presidents also attended the presentation.
Malik said without water 20 million acres of fertile land would dry up in a week and tens of millions of people would face starvation. No army, with bombs and shellfire, could devastate the country as India by cutting off river flows, he stressed.
He urged the US to ensure implementation of the Indus Water Treaty in letter and spirit, sharing of complete information about water flows as per Article VI of the treaty and installation of telemetry system on rivers by international agencies.
Besides, he added, the country should be compensated for loss of 0.2 million acre feet of water to Baglihar and protection of watershed in upper reaches (J&K) of western rivers.
According to the presentation, Indian manipulation of river water goes back to 1948 as all the rivers on which Pakistan depends originate from India and Kashmir.
The presentation further said between 1951 and 1960 the US took keen interest in water issues leading to the Indus Water Treaty in 1960. The World Bank was the facilitator in appointment of neutral experts and arbitration. Three eastern rivers (Ravi, Beas and Sutlej) were given to India and three western rivers (Indus, Jhelum and Chenab) to Pakistan.
However, last-minute changes in the treaty permitted India irrigation of 1.343 million acres (2.85 MAF) from western rivers. Water for Pakistan was not quantified.
All water heads originated in Kashmir, the jugular vein of Pakistan, he said, adding through annexation of Kashmir India managed to take control of Pakistan’s ‘lifeblood’.
India first used the water weapon in 1948, prompting an intervention by US President Truman. Under the Indus Water Treaty, India cannot stop or interfere with western rivers, whereas in case of Baglihar Dam India did not meet the treaty’s provisions of sharing information. India withheld 0.2 MAF of water in case of Baglihar.
He said India was building a huge storage facility (national river linking project) at a cost of $120 billion to be completed in 2016 which might result in conflicts with neighbouring countries including China, Bangladesh, Bhutan and others.
India was also blatantly violating commitment to ensuring 50,000-plus cusecs in Chenab at Marala. The presentation said that under-construction Kishanganga Dam was a severe threat to Neelum-Jhelum Hydel Project of Pakistan.
Showing posts with label water. Show all posts
Showing posts with label water. Show all posts
Saturday, February 6, 2010
Tuesday, January 12, 2010
Energy sector's some profound woes
BUSINESS RECORDER
EDITORIAL (January 13 2010): Energy sector's woes appear to be multiplying. According to sources in the Ministry of Finance, inter-corporate energy sector's gross receivables have now crossed Rs 419 billion against their payables of Rs 279 billion, leaving a huge gap of Rs 140 billion.
Total receivables of Pepco stood at about Rs 175 billion on January 4, 2010 as against its payables of about Rs 141 billion, leaving a gap of about Rs 35 billion, while PSO's receivables stood at Rs 75 billion against its payables of about Rs 60 billion. Likewise, receivables of OGDC against power and gas companies stood at about Rs 53 billion, while Pak Arab Refinery Limited owed about Rs 23 billion to oil and power companies. KESC's total payables stood at about Rs 45 billion on 4th January as against its receivables of about Rs 13 billion.
In an attempt to reduce inter-corporate circular debt (ICCD), Finance Ministry released Rs 15 billion on 6th January and a part of this amount would be paid to refineries and gas companies on behalf of the PSO to improve their cash flows. A Rs 24 billion capital injection by the Federal Government in June, 2009 had reduced the size of the ICCD by Rs 106 billion through a cycle of book adjustments.
It was also confirmed that Pepco would not be given more than Rs 55 billion as subsidies during the current year, in accordance with commitments made to international lending agencies and its revenue shortfall would be bridged through recoveries, efficiency and tariff increases.
While the above situation would look like a nightmare, the case of PSO, which plays a central role in supplying the needed fuel to the energy sector, is of special significance due to its extremely negative ramifications on the economy of Pakistan and its people. There are reports that refineries have refused to honour the order of PSO because of non-payment of their dues, which have soared to over Rs 60 billion.
PSO is also unable to import furnace oil due to acute financial constraints. In the latest development, the arrival of two ships carrying furnace oil has been delayed due to non-availability of the required liquidity. Fuel reserves are reported to have declined by 50 percent from 24 days' stocks, putting the internal power generation in the country in the danger zone.
This decline has occurred at a time when the country is in the grip of massive loadshedding and in dire need of efficient supply of fuel. As of January 4, oil stocks for Kot Addu Power Generation Company were reported for one day only, while Hubco and AES Pak Gen+Lalpir had stocks for three days and two days, respectively.
Thermal power-generation came down to only 2,261 MW as against the installed capacity of 4,828 MW. Obviously, this appalling situation would further aggravate if the slow supply of fuel to thermal houses continues and PSO fails to import more furnace oil.
Clearly, this nightmarish situation has not developed in a day or two but is a self-inflicted disaster, which owes its origin to criminal mismanagement in the past. In too many ways the frightful situation has the true potential to inflict harm on the economy beyond all hope of repair.
In fact, even a modern, vibrant and industrialised economy is unimaginable without an adequate and smooth supply of energy throughout the year. A combination of factors has added to the woes of the energy sector in Pakistan. Authorities of the country have not been able to exploit the full potential of hydropower generation mainly due to political reasons.
Adding insult to injury is the fact that the water level has significantly decreased in both the Tarbela and Mangla dams. Their capacity to produce electricity has been constrained due to silting and more recently, canals have been closed for cleaning and are likely to remain so for another month.
Thermal power is decreasing fast due to a serious lack of liquidity at PSO, a huge amount of circular debt and a lack of proper planning and management. We talk too much about alternative sources of energy, including from coal, but there is almost nothing practical on the ground. The import of gas from Iran or other sources, which could have solved the problem to some extent, still looks like a distant possibility.
There are nuances of irony in the present situation. All and sundry, including the government, talk too much about impending energy shortages, but there is nothing on the ground to indicate a measured response to such challenges.
Even the issue of circular debt is not likely to be resolved soon despite a clear understanding with the IMF. As a last resort or in a desperate bid, government gives some money to PSO or other concerned entities or asks the banks to come to its rescue, but budgetary constraints would not let the government use this option freely in future.
All of this suggests that the stage is set for a collision between problems that have the capacity to literally bring the people on the streets and the country on its knees. We would implore the government to urgently attend to the issue before it becomes truly catastrophic. So far as tackling the problem through improved recoveries and efficiency is concerned, nobody could be sure about the success of such a strategy because of past experience.
EDITORIAL (January 13 2010): Energy sector's woes appear to be multiplying. According to sources in the Ministry of Finance, inter-corporate energy sector's gross receivables have now crossed Rs 419 billion against their payables of Rs 279 billion, leaving a huge gap of Rs 140 billion.
Total receivables of Pepco stood at about Rs 175 billion on January 4, 2010 as against its payables of about Rs 141 billion, leaving a gap of about Rs 35 billion, while PSO's receivables stood at Rs 75 billion against its payables of about Rs 60 billion. Likewise, receivables of OGDC against power and gas companies stood at about Rs 53 billion, while Pak Arab Refinery Limited owed about Rs 23 billion to oil and power companies. KESC's total payables stood at about Rs 45 billion on 4th January as against its receivables of about Rs 13 billion.
In an attempt to reduce inter-corporate circular debt (ICCD), Finance Ministry released Rs 15 billion on 6th January and a part of this amount would be paid to refineries and gas companies on behalf of the PSO to improve their cash flows. A Rs 24 billion capital injection by the Federal Government in June, 2009 had reduced the size of the ICCD by Rs 106 billion through a cycle of book adjustments.
It was also confirmed that Pepco would not be given more than Rs 55 billion as subsidies during the current year, in accordance with commitments made to international lending agencies and its revenue shortfall would be bridged through recoveries, efficiency and tariff increases.
While the above situation would look like a nightmare, the case of PSO, which plays a central role in supplying the needed fuel to the energy sector, is of special significance due to its extremely negative ramifications on the economy of Pakistan and its people. There are reports that refineries have refused to honour the order of PSO because of non-payment of their dues, which have soared to over Rs 60 billion.
PSO is also unable to import furnace oil due to acute financial constraints. In the latest development, the arrival of two ships carrying furnace oil has been delayed due to non-availability of the required liquidity. Fuel reserves are reported to have declined by 50 percent from 24 days' stocks, putting the internal power generation in the country in the danger zone.
This decline has occurred at a time when the country is in the grip of massive loadshedding and in dire need of efficient supply of fuel. As of January 4, oil stocks for Kot Addu Power Generation Company were reported for one day only, while Hubco and AES Pak Gen+Lalpir had stocks for three days and two days, respectively.
Thermal power-generation came down to only 2,261 MW as against the installed capacity of 4,828 MW. Obviously, this appalling situation would further aggravate if the slow supply of fuel to thermal houses continues and PSO fails to import more furnace oil.
Clearly, this nightmarish situation has not developed in a day or two but is a self-inflicted disaster, which owes its origin to criminal mismanagement in the past. In too many ways the frightful situation has the true potential to inflict harm on the economy beyond all hope of repair.
In fact, even a modern, vibrant and industrialised economy is unimaginable without an adequate and smooth supply of energy throughout the year. A combination of factors has added to the woes of the energy sector in Pakistan. Authorities of the country have not been able to exploit the full potential of hydropower generation mainly due to political reasons.
Adding insult to injury is the fact that the water level has significantly decreased in both the Tarbela and Mangla dams. Their capacity to produce electricity has been constrained due to silting and more recently, canals have been closed for cleaning and are likely to remain so for another month.
Thermal power is decreasing fast due to a serious lack of liquidity at PSO, a huge amount of circular debt and a lack of proper planning and management. We talk too much about alternative sources of energy, including from coal, but there is almost nothing practical on the ground. The import of gas from Iran or other sources, which could have solved the problem to some extent, still looks like a distant possibility.
There are nuances of irony in the present situation. All and sundry, including the government, talk too much about impending energy shortages, but there is nothing on the ground to indicate a measured response to such challenges.
Even the issue of circular debt is not likely to be resolved soon despite a clear understanding with the IMF. As a last resort or in a desperate bid, government gives some money to PSO or other concerned entities or asks the banks to come to its rescue, but budgetary constraints would not let the government use this option freely in future.
All of this suggests that the stage is set for a collision between problems that have the capacity to literally bring the people on the streets and the country on its knees. We would implore the government to urgently attend to the issue before it becomes truly catastrophic. So far as tackling the problem through improved recoveries and efficiency is concerned, nobody could be sure about the success of such a strategy because of past experience.
Sustainable environmental strategy: water, food, energy security vital to poverty alleviation
BUSINESS RECORDER
RAJA AQEEL & SEHRISH WASIF
ISLAMABAD (January 13 2010): Security of water, food and energy must be the cornerstones of new world sustainable environmental strategy to achieve the goals of poverty alleviation, population control and trend of urbanisation in a meaningful manner.
The strategy aimed at making sustainable commitments, outlining how the World Bank would work with client countries to meet the environmental challenges. This was the consensus of speakers on the first day of a two-day workshop on "World Bank (WB) Group Environment Strategy and Institutional Analysis of Air Quality Management in urban Pakistan," organised by the World Bank here on Tuesday.
Speaking on the occasion, Senator Humayon Khan Mandokhel, Chairman of the Senate Committee on Environment, said that being an agricultural economy, "we mainly depend on natural resources and their judicious use is need of the hour." He stressed the need for strict compliance with the environment laws taking into account the economic benefit of the policies. The assistance of the World Bank, he added, had prompted the local authorities to make environment development projects sustainable.
Speaking next, Javaid Afzal, senior environment specialist of the World Bank, said that the Environment Ministry, in collaboration with the WB, was preparing technical assistance loan for implementation of National Environment Policy (NEP). This workshop is a part of the ongoing global consultations, which the WB is undertaking to prepare its new environment strategy.
He said that through this assistance, the ministry and the bank would work on institutional strengthening, setting up pilots to reduce pollution load and draw out national strategy on climate change. The WB is helping the Ministry of Industries and Production in mainstreaming environmental management with industrial processes through non-lending technical assistance.
"The Bank's Environment Strategy, formulated in 2001, was successful in mainstreaming environment into development. Our new environment strategy seeks to address persistent challenges such as environmental health and pollution management, social equity, and sustainable natural resource management, as well as the growing challenges of climate change and urbanisation," he added
Naveed Naqvi, acting WB head in Pakistan, said that sustainable development was economically, socially and environmentally sustainable and key to all strategies and policies leading to the ultimate goal of poverty alleviation. He further said that the new strategy would build on the bank's first environmental strategy, titled "Making sustainable commitments: an environment strategy for the World Bank", formulated in 2001.
That strategy outlined how the World Bank would work with the client countries to address their environmental challenges and to ensure that the projects and programmes integrated the principles of environmental sustainability. The Sindh government has also requested the World Bank to help in identifying environmental priorities and propose investment operations for their management. The urgency of addressing Pakistan's environmental problems had probably never been greater, he said.
Conservative estimates presented in the WB report suggests that environmental degradation costs the country at least six percent of the GDP or about Rs 365 billion per year, as these costs fall disproportionately upon the poor. Experts said that the most significant causes of environmental damage identified and estimated include illness and premature mortality caused by air pollution, diahorrea and typhoid due to inadequate water supply, sanitation and hygiene and reduced agricultural productivity due to soil degradation etc.
RAJA AQEEL & SEHRISH WASIF
ISLAMABAD (January 13 2010): Security of water, food and energy must be the cornerstones of new world sustainable environmental strategy to achieve the goals of poverty alleviation, population control and trend of urbanisation in a meaningful manner.
The strategy aimed at making sustainable commitments, outlining how the World Bank would work with client countries to meet the environmental challenges. This was the consensus of speakers on the first day of a two-day workshop on "World Bank (WB) Group Environment Strategy and Institutional Analysis of Air Quality Management in urban Pakistan," organised by the World Bank here on Tuesday.
Speaking on the occasion, Senator Humayon Khan Mandokhel, Chairman of the Senate Committee on Environment, said that being an agricultural economy, "we mainly depend on natural resources and their judicious use is need of the hour." He stressed the need for strict compliance with the environment laws taking into account the economic benefit of the policies. The assistance of the World Bank, he added, had prompted the local authorities to make environment development projects sustainable.
Speaking next, Javaid Afzal, senior environment specialist of the World Bank, said that the Environment Ministry, in collaboration with the WB, was preparing technical assistance loan for implementation of National Environment Policy (NEP). This workshop is a part of the ongoing global consultations, which the WB is undertaking to prepare its new environment strategy.
He said that through this assistance, the ministry and the bank would work on institutional strengthening, setting up pilots to reduce pollution load and draw out national strategy on climate change. The WB is helping the Ministry of Industries and Production in mainstreaming environmental management with industrial processes through non-lending technical assistance.
"The Bank's Environment Strategy, formulated in 2001, was successful in mainstreaming environment into development. Our new environment strategy seeks to address persistent challenges such as environmental health and pollution management, social equity, and sustainable natural resource management, as well as the growing challenges of climate change and urbanisation," he added
Naveed Naqvi, acting WB head in Pakistan, said that sustainable development was economically, socially and environmentally sustainable and key to all strategies and policies leading to the ultimate goal of poverty alleviation. He further said that the new strategy would build on the bank's first environmental strategy, titled "Making sustainable commitments: an environment strategy for the World Bank", formulated in 2001.
That strategy outlined how the World Bank would work with the client countries to address their environmental challenges and to ensure that the projects and programmes integrated the principles of environmental sustainability. The Sindh government has also requested the World Bank to help in identifying environmental priorities and propose investment operations for their management. The urgency of addressing Pakistan's environmental problems had probably never been greater, he said.
Conservative estimates presented in the WB report suggests that environmental degradation costs the country at least six percent of the GDP or about Rs 365 billion per year, as these costs fall disproportionately upon the poor. Experts said that the most significant causes of environmental damage identified and estimated include illness and premature mortality caused by air pollution, diahorrea and typhoid due to inadequate water supply, sanitation and hygiene and reduced agricultural productivity due to soil degradation etc.
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