Defends PPP’s Power Policy
Speech of Ms Benazir Bhutto
Karachi – July 28, 1997
Leader of the Opposition and former prime minister Mohtarma Benazir Bhutto has denounced the Ehtesab Cell’s assertion Saturday claiming to have uncovered fraud worth billions of rupees in the PPP government’s power policy involving the former prime minister and her husband Asif Ali Zardari and directed her counsel Babar Awan to initiate legal proceedings against the Ehtesab Cell and its chief Senator Saifur Rahman for defaming opposition leader through the charade of media trial.
Benazir Bhutto signed the wakalatname Sunday morning and Counsel Babar Awan is preparing the legal notice to be served on the Ehtesab Cell. In a statement issued in Karachi the former prime minister said that allegations of the Ehtesab Cell with regard to the PPP government’s power policy were no more than a drama, political stunt at aimed at victimisation of political opponents and defaming the opposition leader and her husband. She said she was being victimised by a coterie of bank loan defaulters, tax evader and drug pushers because her government had exposed them and decided to tighten the noose around them.
She said the energy policy of the previous PPP government was approved by the cabinet after due deliberations and was described by the World Bank as a role model for the developing countries of the third world. Leading international investors and leaders in the field of energy including U.S energy Secretary Hazel O’Leary had hailed Pakistan’s energy policy.
Benazir Bhutto said she was ready for a public debate on the energy policy of the PPP government which she said was her government’s singular achievement in the field of infrastructure development and ranked next only to the restoration of peace in Karachi during her second term in office. She said that before endorsing the policy the cabinet and the experts had thoroughly examined and debated the two broad areas of concern and criticism. These she said were i) the relative increase in power tariffs ii) and creation of excess power capacity in the country.
The power tariffs she said are bound to go up whenever new plants are set up because of the higher capital costs required to finance new capacity. The question to be addressed was which of the two systems namely the public sector or the private sector would be economically more efficient. A World Bank study and our own experts reports suggested that the private sector was more efficient. According to these studies, she said the average annual tariff increase required by the private sector programme was 14.3 percent compared to 18.3 percent required by WAPDA. She said that under the energy policy of her government the tariff increases were so distributed that except for the first two years 1997 and 1998, when the bulk of the private power was to come on stream, tariff increases significantly declined to eventually become negative in subsequent years. This was in sharp contrast with the way tariff increases took place in the Wapda system, where tariff increases are necessary to meet the investment requirements well in advance of the projects coming on stream.
Pakistan’s private power programme is competitive relative to other countries as was borne by an IFC study and that was why there was a talk in India of buying electric power from Pakistan, she said.
Benazir Bhutto said that the fear of a glut in power production was also addressed and it was concluded that it was unfounded keeping in view the very low level of electric power consumption in Pakistan vis a vis other countries in the region. She said Pakistan had an average per capita consumption of 435 kwh as against 1150 kwh in Turkey, 1100 in Iran and 850 in Egypt. The glut fear, she said, was unfounded when viewed in the backdrop of the fact that against an estimated demand for 3000 MW during the Eighth plan, applications for more than 24000 MW were received. Still, the government restricted the issuance of letters of support (LoS) for only about 6000 MW, with margin for drop outs.
Benazir Bhutto said that she can not recall off hand technical figures but does remember the base scenario prepared by the World Bank at the time of the appraisal of the Ghazi Barotha project in November 1995. According to this report she said, that taking into account the ongoing power projects and the Ghazi Barotha, an additional 5000-6000 Mw capacity still needed to be implemented by the private sector.
Talking about the specific allegation relating to the sale of Kot Addu power plant Benazir Bhutto ridiculed the Redco Cell’s allegation. She asked Nawaz Sharif to go through the relevant files more carefully and he will discover that the transparency in the sale was welcomed and appreciated even by the party which had lost the bid. This she said was unprecedented and people like Mian Nawaz Sharif and Senator Saifur Rahman who have known only loot and plunder through underhand deals can not even understand much less appreciate such above board transparency. She said that if her government was to patronise any private party then the WAK power project of Senator Waqar would not have complained of an ‘unfair deal’ meted out to them and their power project would have been the first to come on line.
Regarding the transmission line (Lahore-Jamshoro) Benazir Bhutto said that her government was proceeding so cautiously in the matter that even the then British Prime Minister Mr.John.Major wrote her a letter. The contents of the letter is a sufficient proof to rebut allegation of Nawaz regime that her government was in a hurry to imprudently award the contract. Benazir Bhutto demanded that the letter of John Major should also be shown on the T.V. by the Nawaz regime for putting the record straight.
Benazir Bhutto said she was not surprised with the latest tirade of Ehtesab Cell. Whenever she goes abroad the cell comes out with such fictitious stories to tarnish her image and harass her. She said that on her first trip abroad her political secretary was off loaded from the plane, on the second trip her aid Munawar Suhrawardy was detained and now a 76 year old ex POW was threatened to produce his son, a U.S. citizen, failing which he and his entire family members will be arrested.
Benazir Bhutto said she was not afraid of these tactics and would fight back the looters, the tyrants and the brigands comprising of Nawaz Sharif and his coterie.