Pakistan Prime Minister Benazir Bhutto is giving priority to overcoming the country's chronic energy shortage — and is hoping previously reticent United -States investment will help her do the Job.
There are 20.000 villages without electricity — almost one-third of the total — and she alms to bring electricity to 4.000 every year, an ambitious target which, if successful, would be a powerful vote-getter.
Even where it is available, supply Is erratic. There are longer power cuts in the summer for all uSers but those in villages are especially hard hit.
Power shortages In the cities are an even more immediate concern to the government. because they are holding back Industrial growth.
Overall, demand at 12 per cent a year is outstripping supply, which is growing at seven per cent.
The government is hoping that private capital will come to the aid of the ailing sector and takes heart from the response of the team of United States Industrialists who accompanied US Energy Secretary Hazel O'Leary on her recent visit. They signed 16 agreements worth 3.7 billion dollars, which, if all come to
fruition, would produce an additional 3.507 MW. .
The deals are regarded as a major breakthrough because four years ago Washington suspended official economic and military aid to Islamabad as a result of fears that Pakistan was engaged in the manufacture of atomic bombs. 1
Unless the US President can certify to Congress that Pakistan does not possess a nuclear bomb, aid cannot be restored.
Initially, Pakistan's position was that its nuclear programme was for energy purposes only. Now Islamabad's stand Is that it has the capability of manufacturing a bomb
but has not and will, not do so.
Stalemate continues over the nuclear issue as Pakistan has refused to open its nuclear programme for international inspection. It argues that it will not sign the nuclear Non-Proliferation Treaty unless its neighbour and adversary India does the same.
The aid freeze sends a
strong signal to US companies not to invest. They were already reticent: though Pakistan was an ally of Washington during the Cold War; the US private sector has Invested a niggardly 450 million dollars here since Independence in 1947.
The prospects of greater US private Investment has angered the' fundamentalists. Kazi Hussain Ahmad, head of the Jamaat-e-lslami party, dubbed it "a high-level conspiracy to enslave the nation and capture political power as well as resources. The United Slates wants to impose her political system and culture to damage the moral values of Muslim's."
But aware of the potential of bringing electricity to rural areas. where she has most support, Prime Minister Bhutto said: This is a success story for the villagers of Pakistan. And she stressed: "Pakistan would like to develop a multidimensional relationship with the United States.”
However, the new investment focuses on oil-fired power stations, which critics say will considerably increase the country's one billion dollars a year oil Import bill. Oil provides 40 per cent of the country's commercial energy * mix (gas contributes another 38 per cent), with local production accounting for about
one-third of oil requirements.
The private sector will also charge more for, electricity; It will sell to the government at 1.99 rupees per unit, compared to electricity from hydropower which the government gets for 0.15-rupees and ’ sells to the consumer at an av-‘ erage of 1.4^ rupees per qnit.
Pakistan has vast hydropower potential, and dam reservoirs have the additional advantage of also supplying Ir- < rigation water.
But such projects need huge investments which foreign Companies and donors are often nervous about funding because of the political and environmental rows which' now inevitably surround construction of big dams.
The government's proposed 10 billion dollars Kalabagh Dam. for example, has been embroiled in a decade-long controversy between Sindh and North West Frontier Province.
The World Bank and other institutions have expressed an Interest 4n the project, but Sindh says that the project will deprive It of irrigation water while its neighbouring province says that It will lose a. vast area of land for the reser-voii — GenwaiVew»
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(Tariq Butt la chief reporter on The Newt. Islamabad^