by Azhar Bukhari
Opportunities are in abundance
Pakistan only needs a committed push to set right foot for a sparkling era
Pakistan has recently indicated its commitment to renewable energy sources, but realising these in practice could still be a long way off.
The country is blessed with an abundance of renewable energy potential, but so far this remains unharnessed except for a few large hydroelectric projects.
The country, historically an energy importer, is facing serious energy shortages while global fossil fuel prices continue their upward spiral. The effects on the economy are marked: interruptions in energy supply to industry, for instance, have hit the country's exports hard.
Experts are of the view that Pakistan needs to initiate a transition towards greater use of renewable energy as an indigenous, clean and abundant resource.
But the government drive for renewables has its critics. The problem, says an energy expert, is that the alternative energy initiatives have been offered at a stage when the damage has already been done to the economy.
"The gap between demand and supply of power has been allowed to grow by not addressing the interrupted supply to the domestic and agriculture sector as much as the industrial sector," he said. As a result, the cost of energy and energy production has already made Pakistan's products uncompetitive compared with those of India.
He suggested that all the country's power plants should be coal-fired, and all industries that need fuel for heating purposes, such as cement factories, should use coal, a suggestion he justifies on the basis of the huge reserves of coal in the provinces of Sindh and Punjab. The coal reserves’ quality is good and it can be a better substitute than high-priced oil imports.
Ali Zulqarnain, an engineering professor and alternative energy researcher at NED University of Engineering & Technology in Karachi, writes in an article, "There are areas in and around Karachi suitable for installing both solar and wind energy plants to produce cheap electricity. Many science activists also advocate the use of hydropower, since Pakistan is a water-abundant country.”
Interestingly, despite having the world's best water resources, the production of hydropower has been sidelined by the government. If the government had properly exploited hydropower, the country could now be enjoying a 5,000 megawatt power supply from the Kunhar-Neelum-Jhelum river system in Azad, Kashmir, as hydropower projects could also reduce the cost of electricity.
It is worth to mention here that, in 2001, the Water and Power Development Authority of Pakistan identified 22 sites for launching hydropower projects to meet the ever-increasing demand for cheap power. It indicated that about 15,074 megawatts could be generated on the completion of these projects, which would also meet the water irrigation requirements for the growing agriculture sector.
In terms of social equity, renewable energy could also raise Pakistan's present low per-capita consumption of energy and improve access to modern energy supplies, helping to alleviate poverty and reduce the burden on rural women, who collect biomass for fuel.
In the future, Pakistan may adopt other technologies for generating power from renewable energy sources, such as municipal waste and landfill methane geothermal recovery, anaerobic biomass gasification, biological fuels, fuel cells and ocean waves.
Currently, Pakistan is witnessing a serious power crisis due to the depletion of conventional sources of energy. Experts believe that global warming and deteriorating environmental conditions are adversely affecting Pakistan’s water resources. The rivers are dying out at a slow but steady pace and with them, Pakistan’s chances of producing cheap hydropower are diminishing as well.
Although huge coal reserves that can be used for power generation and for resolving the prevalent power crisis have been discovered lately in Sindh, but mining these resources requires immense amounts of investment. Moreover, this is by no means an environment-friendly solution to the problem.
The most appropriate answer, according to some experts, is exploring renewable sources of energy such as wind, solar and even tidal energy. These not only have huge power-generation potential, but are also extremely environment-friendly and are successfully being used for electricity-generation in various countries of the world.
Unfortunately, not much research is being carried out in Pakistan for utilizing renewable sources of energy for power production. This is despite the fact that an Alternate Energy Development Board (AEDB) exists in the country. The purpose of this board is to raise awareness about renewable energy sources and to promote them in the country.
According to some other experts, the total solar energy available to the earth is approximately 3,850 ZetaJoules (ZJ) per year while the worldwide energy consumption was 0.571 ZJ in 2005.
Another area with respect to renewable energy resources is the exploration of wind power, the conversion of wind energy into electricity, using wind turbines. By the end of 2008, the worldwide capacity of wind-powered generators was 95.9 GigaWatts (GW).
Currently, wind produces just over one percent of worldwide electricity use, and accounts for approximately 19 percent of electricity production in Denmark, nine percent in Spain and Portugal, and six percent in Germany and the Republic of Ireland. Pakistan however, lags behind in this area as well, despite the fact that in neighbouring countries, such as India and China, the potential of wind power is successfully being used for electricity generation, albeit at a small scale. More importantly, extensive research is being carried out in this area in these countries.
Another area which needs the immediate attention of local authorities concerned is tidal power, also known as tidal energy. This is a form of hydropower that exploits the movement of water caused by tidal currents or the rise and fall in sea levels due to the tides.
Tidal power is yet to be widely used anywhere in the world, but it also has the potential for future electricity generation. Experts even believe that it is more profitable than wind energy and solar power.
In Pakistan, which has been gifted with over 700 kilometers of coastline, tidal power can prove to be a solution to the perpetual power crisis. In order to do that, however, authorities concerned will have to change their mindset and attitude towards emerging as well as environmental-friendly technologies.
Interestingly, at a time when extensive research is being carried out around the globe for finding cheap sources of energy, many people in Pakistan have not even heard of unconventional technologies being used elsewhere in the world. These include geothermal power, which also has the potential to contribute towards eliminating the persisting power crisis in the country.
Geothermal power is energy generated by heat stored under the Earth’s surface or the collection of absorbed heat in the atmosphere and oceans.
Similarly, biofuels, biomass and wave power are some other potential energy sources which need to be explored by authorities concerned, researchers, and investors, in order to provide electricity to far-flung and remote areas of the country, as well as to meet the growing demand of electricity for industrialization and agriculture.
Most importantly, thousands of tonnes of domestic waste produced daily produced in the country is poorly managed and is dumped without keeping in view its effects on the local environment. This waste can also be used for electricity production by using waste heat electricity generation technology. Even though this method would not be as environment-friendly as renewable energy sources, but it can help diminish the gap in demand and supply of the electricity to Pakistan.
The Explorers...
Tuesday, January 31, 2017
Wednesday, February 16, 2011
Wednesday, December 30, 2009
CNG crisis sharpens, adds woes to public
by Azhar Bukhari
LAHORE: Like other parts of the country, the All Pakistan CNG Association strike on Wednesday added to the public woes, continuing to plague the residents of the provincial capital.
The association announced strike across the country from December 30 for indefinite period against the proposed gas price hike as well as the two-day weekly closure of the filling stations under load management.
Though partial strike was observed in the provincial capital, people had been facing numerous problems like absence of public transport, as hundreds were queued up outside the CNG filling stations, which continued the sale.
The commuters were facing great difficulties due to absence of transport due to strike call by All Pakistan CNG association.
Due to the strike call the transport remained off the roads creating great difficulties for commuters.
People in Punjab and NWFP are suffering great difficulties due to the situation. According to the sources, as many as 80 percent CNG filling stations in Rawalpindi, Islamabad, Murree, Jehlum, Attock, Sheikhupora, Kasur, Okara, Sahiwal, Multan and other areas of the country remained closed.
More than 1,800 CNG stations in Punjab were closed over APCNGA’s strike call, more than 2,800 CNG filling stations are closed under the strike call.
The government has already ordered to close CNG stations for two days in a week. Meanwhile gas supply is suspended to Pothohar region since last two days and now CNG stations in the region have also closed to contribute in countrywide strike while, gas supply to Attock and Jehlum has been suspended from Wednesday.
Talking to The Post, president of APCNGA, Ghayyas Paracha, said over 3,000 CNG filling stations across the country would remain closed as long as the strike is on.
Paracha demanded that the government should revive the difference in CNG and petrol prices according to the 1992 Petroleum Policy in which the price of CNG was set half of that of petrol. He maintained that gas load-shedding for CNG stations be stopped immediately if the federal government accepts their demands.
Paracha said it is the salaried class and others from middle-income groups that would suffer the most financially after the increase in CNG prices.
The APCNGA president accused some petrol dealers for having interests in importing LNG, LPG and other substitutes that may have a role to play in damaging the CNG business.
Ghayyas Paracha also suggested that the government should announce a 10-year gas policy after consulting the CNG association so that investors in this sector could plan their businesses accordingly.
Following the strike thin public traffic was present on the roads, unleashing problems for a large of citizens who were solely dependent on public transport or vehicles only on CNG for commuting.
Thursday, November 12, 2009
Wake up to save sinking textile Titanic
by Azhar Bukhari
APTMA Chairman Gohar Ejaz highlights issues facing industry
Says sector capable to shell out 5 time more returns than KLB
If facilitated, textile industry can shell out five time more returns in a fiscal year than the most debated Kerry-Lugar Bill.
This was the upshot of discussion with All Pakistan Textile Mills Association Punjab Chairman Gohar Ejaz other day.
A quite, cool and calm Gohar, who has a thorough command on all the issues being faced by the country, spoke at length particularly on textile industry’s problems.
He was very candid when he said, “we have to establish pro-industrial polices to get back on rails, as people can manage with electricity and gas loadshedding but can’t survive with unemployment”.
“You always need some bitter pills to cure chronic ailments and this time the domestic consumers would have to take some bitter pills, I mean, save energy to run the industry”.
Renowned industrialist, Gohar Ejaz was of the view that there is no acute shortage of electricity or gas, the only thing which the country lacks is dearth of management.
“Things would hardly take any positive turn unless and until both short term and long term policies are evolved,” he maintained.
Gohar, while expressing his concerns over law and order situation said, the nerve-wrecking string of terrorist attacks in the country is virtually proving to be the last nail in coffin of textile industry, which is struggling hard to survive amid unprecedented load shedding, abnormal rise in bank mark and suspension of gas supply to the 400 textile mills in Punjab and NWFP for long five months.
He pointed out that gas disconnection to the textile industry has halted work at the big business houses, as they were not able to keep their wheel moving round the clock due to non-availability of gas to their power plants.
He appreciated first-ever-five-year textile policy in August last, which may take the industry’s exports to $25 billion by 2014, saying that it could extend certain relief to the industry in terms of long term finance, export refinance, and duty drawback if the government be serious to implement this.
“Sadly, the implementation on the relevant SROs is yet a far-fetched idea, as none of the government agencies is in mood of following the guidelines. Even the State Bank of Pakistan has not issued instructions to the banks in order to facilitate the textile industry on LTF and ERF”, he added.
The government now needs to set its priorities and bring about a framework which will give practical meaning to this policy. “Needless to say that this framework should be formulated ASAP, keeping in view that it should be transparent, works fast and should be meaningful to the industry”.
Gohar Ejaz said that more than 200 million people are linked with textile industry and if the government would not implement Textile Policy 2009-14, the 400 textile units would be closed down depriving 2.5 million workers off their jobs.
He maintained that Sui Northern Gas Pipe-lines Ltd (SNGPL) has suspended gas supply to 300 textile mills from October 20 and a notice has been issued that the suspension would be remained till 31 march 2010.
Gohar feared if the government fails to implement new textile policy, mill owners will have no other option left except to close its hundreds of textile units, which may could unemployed 2.5 million people.
He maintained that SNGPL has suspended supply to APTMA’s 90 per cent members in Punjab and NWFP even in the third week of October when the over all gas demand is hanging between 1,600 to 1,700 MMCFD while short fall is of only 160 to 175 MMCFD.
Gohar Ejaz demanded the government to implement Textile Policy initiatives regarding supply of gas to the textile industry by upgrading the priority of gas supply at 2nd place in the Natural Gas Allocation & Management Policy 2005.
He showed grave concern over the gas curtailment of 175 MMCFD of the textile industry in the Punjab in October, as the winter yet to set in.
“Textile industry will lose export of US $ 1 billion to 2 billion per month, about US $ 5 to 6 billion in the financial year, as textile mills will not be able to fulfil export orders for Christmas & Spring season on time”, said APTMA chairman.
“It is high time for the textile industry to get out of recession as the demand for textiles is increasing. Once the orders are lost, international buyers will not depend on us even for the next years,” Gohar said adding that already 90% of the knitwear industry in Punjab with US $ 2 billion export has closed due to terrorism & security concerns.
He maintained that continuous gas supply to the textile industry is of vital importance at this time when industry is poised to recover & meet export orders.
APTMA chairman said that the government has failed to implement the 2nd priority of the textile industry in the priority list of Natural Gas Allocation & Management Policy as recommended in the Textile Policy 2009-14. It is an opportune time to implement the recommendations.
As the domestic load is increasing, it is necessary to educate general consumers to start conservation of gas used in geysers & heaters & save energy to run industry. In the greater national interest.
He urged the federal government and SNGPL to exempt textile industry from gas curtailment and due priority be given to the Export Oriented Textile Industry.
Ha also urged the people to lessen the use of gas during Winter to run the industry. He maintained by promoting gas saver home appliances country can save more than 600 MMCFD gas during the season. He also demanded the government to give subsidy on gas saver home appliances and launch an awareness campaign among masses to keep the wheel moving.
Gohar called upon the government to save the sinking Titanic of textile in order to ensure economic viability of Pakistan.
He said that besides the basic textile, the value-added sector was feeling the pinch hard, as it has received no tangible orders ahead of the Christmas season in Europe, falling within two months from now.
Saturday, September 5, 2009
Telecom; a magnet for FDI
by Azhar Bukhari
CFO Warid, Tariq Gulzar portrays a vivid sketch of future communication
Says Warid catering to all segments of society with affordable packages
Country’s telecom sector has remarkable potential to attract huge Foreign Direct Investment (FDI), as the sector witnessed growth even when world was facing one of its worst recession.
If the government continues to facilitate the service providers, the fast and feasible means of communication can be provided to each and every member of the society at very low costs.
This was the upshot of the discussion that took place with Warid’s Chief Financial Officer, Tariq Gulzar at its Head Office in Lahore.
A quite cool and calm Tariq, who has command on telecom sector-related issues, spoke at length on the opportunities in this sector and issues facing service providers.
He was very candid when he said that in 21st century, cheap sources of communication are the basic need of masses and it is as important sector as textile is.
“At Warid, leading telecom company, we are catering all segments of the society including masses, youth, corporate etc through very affordable packages,” Gulzar maintained.
He said that Warid’s best in class and state of art GSM net work, with a comprehensive portfolio of innovative value added services, is empowering its customers to create their own life style networks. He said that Warid has always kept ‘The customer convenience factor’ as its top priority.
Responding to a question, Tariq Gulzar said that Warid Telecom is a joint venture between Abu Dhabi Group and Singapore’s premier telecom group SingTel. Since Warid launched it commercial service in May 2005 in the country, it has invested more than $1.4 billion and has expanded its network to more than 480 cities. Gulzar added that Warid has set a target to extend its existing coverage to far flung and remaining rural areas in the shortest possible time frame.
To facilitate and provide maximum choice to mobile subscribers, PTA has already introduced Mobile Number Portability (MNP) regime in Pakistan. MNP gives freedom to a subscriber to move to any network in the country whilst retaining their original mobile number along with the prefix. Warid has lately been a major beneficiary of MNP regime and has ported-in large number of subscribers from other mobile companies on its Best Quality Network in Pakistan, the CFO said.
Well informed Gulzar observed that the telecom landscape in Pakistan is evolving quickly in the backdrop of lower tariff’s and stiffening competition. The country’s industrial and population growth rates have led to forecasts that the sector over the next 10 years may grow at a double digit rate, offering significant opportunities for both local and foreign investment. For the record sake, a FDI of $400 Million per quarter was made in the telecom sector in the year 2008 alone.
To a query, the Warid CFO said that Abu Dhabi Group is a leading business group of Middle East and the single largest foreign investor in Pakistan. He maintained that Abu Dhabi Group has diversified business interests, offering strong financial resources and extensive management expertise that result in commercial success for several institutions.
Of Law & Order and economic slow down in the country, the energetic Youngman and Outspoken Gulzar believes that creating jobs and economic opportunities are an effective way to combat militancy. “Creating and providing employment will prevent alienation and give people a reason to ensure that the system runs smoothly,” said Gulzar.
“Pakistan has the potential to attract mega investment in telecom which could also ascertain to revive economy, but this requires focusing on out-of-box solutions and facilitating local and foreign investors by providing more incentives,” he said.
Elaborating on possible solutions, Gulzar said that part of the answer lay in facilitation of existing service providers to motivate others. He said country’s telecom sector has the potential to improve it services and introduce innovations to compete with any developed country.
The chief financial officer said that Pakistan offered high returns on investment and this was the reason that foreign companies were investing their capital and resources in the country, particularly in the telecom sector. “The fact that the economy was largely impervious to the social turmoil of the last few years is evidence of the fact that our economy is far more resilient than we would like to think,” said Tariq.
“There is nothing worse than Pakistanis talking down their economy and their country, which then becomes a self-fulfilling prophecy.” He said there was a mighty disconnect between the perception and reality of Pakistan as a place to do business in. “We have our problems, but we are better off than many countries,” he said adding that criticism of Pakistan’s economy, society and government should only be done on facts.
Profile:
Tariq Gulzar is Chief Financial Officer at Warid Telecom.
He has a combined professional and industry background gained from over 19 years experience, primarily in Europe & North America, in Finance, enterprise-wide risk management, corporate governance, control assurance and general consulting in telecommunication, media & technology industries.
Gulzar is a Fellow Chartered Accountant (Pakistan), a Certified Public Accountant (Colorado, USA) and a Certified Internal Auditor (New York, USA).
Prior to joining Warid, Gulzar was working as the Assistant Vice President in Risk & Regulatory Advisory practice of PricewaterhouseCoopers (PwC), Canada., where he was responsible for delivering internal audit, sustainable process improvement and risk management services to organizations in terms of increased revenues, decreased costs, improved efficiency, control and organizational and process agility in a range of industries.
He has also worked with Mobilink (Pakistan), Millicom International Cellular S A Luxembourg and Modern Times Group AB (Sweden) before joining PwC in Canada.
Monday, August 24, 2009
Exploring alternate energy sources
by Azhar Bukhari
Opportunities are in abundance
Pakistan only needs a committed push to set right foot for a sparkling era
Pakistan has recently indicated its commitment to renewable energy sources, but realising these in practice could still be a long way off.
The country is blessed with an abundance of renewable energy potential, but so far this remains unharnessed except for a few large hydroelectric projects.
The country, historically an energy importer, is facing serious energy shortages while global fossil fuel prices continue their upward spiral. The effects on the economy are marked: interruptions in energy supply to industry, for instance, have hit the country's exports hard.
Experts are of the view that Pakistan needs to initiate a transition towards greater use of renewable energy as an indigenous, clean and abundant resource.
But the government drive for renewables has its critics. The problem, says an energy expert, is that the alternative energy initiatives have been offered at a stage when the damage has already been done to the economy.
"The gap between demand and supply of power has been allowed to grow by not addressing the interrupted supply to the domestic and agriculture sector as much as the industrial sector," he said. As a result, the cost of energy and energy production has already made Pakistan's products uncompetitive compared with those of India.
He suggested that all the country's power plants should be coal-fired, and all industries that need fuel for heating purposes, such as cement factories, should use coal, a suggestion he justifies on the basis of the huge reserves of coal in the provinces of Sindh and Punjab. The coal reserves’ quality is good and it can be a better substitute than high-priced oil imports.
Ali Zulqarnain, an engineering professor and alternative energy researcher at NED University of Engineering & Technology in Karachi, writes in an article, "There are areas in and around Karachi suitable for installing both solar and wind energy plants to produce cheap electricity. Many science activists also advocate the use of hydropower, since Pakistan is a water-abundant country.”
Interestingly, despite having the world's best water resources, the production of hydropower has been sidelined by the government. If the government had properly exploited hydropower, the country could now be enjoying a 5,000 megawatt power supply from the Kunhar-Neelum-Jhelum river system in Azad, Kashmir, as hydropower projects could also reduce the cost of electricity.
It is worth to mention here that, in 2001, the Water and Power Development Authority of Pakistan identified 22 sites for launching hydropower projects to meet the ever-increasing demand for cheap power. It indicated that about 15,074 megawatts could be generated on the completion of these projects, which would also meet the water irrigation requirements for the growing agriculture sector.
In terms of social equity, renewable energy could also raise Pakistan's present low per-capita consumption of energy and improve access to modern energy supplies, helping to alleviate poverty and reduce the burden on rural women, who collect biomass for fuel.
In the future, Pakistan may adopt other technologies for generating power from renewable energy sources, such as municipal waste and landfill methane geothermal recovery, anaerobic biomass gasification, biological fuels, fuel cells and ocean waves.
Currently, Pakistan is witnessing a serious power crisis due to the depletion of conventional sources of energy. Experts believe that global warming and deteriorating environmental conditions are adversely affecting Pakistan’s water resources. The rivers are dying out at a slow but steady pace and with them, Pakistan’s chances of producing cheap hydropower are diminishing as well.
Although huge coal reserves that can be used for power generation and for resolving the prevalent power crisis have been discovered lately in Sindh, but mining these resources requires immense amounts of investment. Moreover, this is by no means an environment-friendly solution to the problem.
The most appropriate answer, according to some experts, is exploring renewable sources of energy such as wind, solar and even tidal energy. These not only have huge power-generation potential, but are also extremely environment-friendly and are successfully being used for electricity-generation in various countries of the world.
Unfortunately, not much research is being carried out in Pakistan for utilizing renewable sources of energy for power production. This is despite the fact that an Alternate Energy Development Board (AEDB) exists in the country. The purpose of this board is to raise awareness about renewable energy sources and to promote them in the country.
According to some other experts, the total solar energy available to the earth is approximately 3,850 ZetaJoules (ZJ) per year while the worldwide energy consumption was 0.571 ZJ in 2005.
Another area with respect to renewable energy resources is the exploration of wind power, the conversion of wind energy into electricity, using wind turbines. By the end of 2008, the worldwide capacity of wind-powered generators was 95.9 GigaWatts (GW).
Currently, wind produces just over one percent of worldwide electricity use, and accounts for approximately 19 percent of electricity production in Denmark, nine percent in Spain and Portugal, and six percent in Germany and the Republic of Ireland. Pakistan however, lags behind in this area as well, despite the fact that in neighbouring countries, such as India and China, the potential of wind power is successfully being used for electricity generation, albeit at a small scale. More importantly, extensive research is being carried out in this area in these countries.
Another area which needs the immediate attention of local authorities concerned is tidal power, also known as tidal energy. This is a form of hydropower that exploits the movement of water caused by tidal currents or the rise and fall in sea levels due to the tides.
Tidal power is yet to be widely used anywhere in the world, but it also has the potential for future electricity generation. Experts even believe that it is more profitable than wind energy and solar power.
In Pakistan, which has been gifted with over 700 kilometers of coastline, tidal power can prove to be a solution to the perpetual power crisis. In order to do that, however, authorities concerned will have to change their mindset and attitude towards emerging as well as environmental-friendly technologies.
Interestingly, at a time when extensive research is being carried out around the globe for finding cheap sources of energy, many people in Pakistan have not even heard of unconventional technologies being used elsewhere in the world. These include geothermal power, which also has the potential to contribute towards eliminating the persisting power crisis in the country.
Geothermal power is energy generated by heat stored under the Earth’s surface or the collection of absorbed heat in the atmosphere and oceans.
Similarly, biofuels, biomass and wave power are some other potential energy sources which need to be explored by authorities concerned, researchers, and investors, in order to provide electricity to far-flung and remote areas of the country, as well as to meet the growing demand of electricity for industrialization and agriculture.
Most importantly, thousands of tonnes of domestic waste produced daily produced in the country is poorly managed and is dumped without keeping in view its effects on the local environment. This waste can also be used for electricity production by using waste heat electricity generation technology. Even though this method would not be as environment-friendly as renewable energy sources, but it can help diminish the gap in demand and supply of the electricity to Pakistan.
Opportunities are in abundance
Pakistan only needs a committed push to set right foot for a sparkling era
Pakistan has recently indicated its commitment to renewable energy sources, but realising these in practice could still be a long way off.
The country is blessed with an abundance of renewable energy potential, but so far this remains unharnessed except for a few large hydroelectric projects.
The country, historically an energy importer, is facing serious energy shortages while global fossil fuel prices continue their upward spiral. The effects on the economy are marked: interruptions in energy supply to industry, for instance, have hit the country's exports hard.
Experts are of the view that Pakistan needs to initiate a transition towards greater use of renewable energy as an indigenous, clean and abundant resource.
But the government drive for renewables has its critics. The problem, says an energy expert, is that the alternative energy initiatives have been offered at a stage when the damage has already been done to the economy.
"The gap between demand and supply of power has been allowed to grow by not addressing the interrupted supply to the domestic and agriculture sector as much as the industrial sector," he said. As a result, the cost of energy and energy production has already made Pakistan's products uncompetitive compared with those of India.
He suggested that all the country's power plants should be coal-fired, and all industries that need fuel for heating purposes, such as cement factories, should use coal, a suggestion he justifies on the basis of the huge reserves of coal in the provinces of Sindh and Punjab. The coal reserves’ quality is good and it can be a better substitute than high-priced oil imports.
Ali Zulqarnain, an engineering professor and alternative energy researcher at NED University of Engineering & Technology in Karachi, writes in an article, "There are areas in and around Karachi suitable for installing both solar and wind energy plants to produce cheap electricity. Many science activists also advocate the use of hydropower, since Pakistan is a water-abundant country.”
Interestingly, despite having the world's best water resources, the production of hydropower has been sidelined by the government. If the government had properly exploited hydropower, the country could now be enjoying a 5,000 megawatt power supply from the Kunhar-Neelum-Jhelum river system in Azad, Kashmir, as hydropower projects could also reduce the cost of electricity.
It is worth to mention here that, in 2001, the Water and Power Development Authority of Pakistan identified 22 sites for launching hydropower projects to meet the ever-increasing demand for cheap power. It indicated that about 15,074 megawatts could be generated on the completion of these projects, which would also meet the water irrigation requirements for the growing agriculture sector.
In terms of social equity, renewable energy could also raise Pakistan's present low per-capita consumption of energy and improve access to modern energy supplies, helping to alleviate poverty and reduce the burden on rural women, who collect biomass for fuel.
In the future, Pakistan may adopt other technologies for generating power from renewable energy sources, such as municipal waste and landfill methane geothermal recovery, anaerobic biomass gasification, biological fuels, fuel cells and ocean waves.
Currently, Pakistan is witnessing a serious power crisis due to the depletion of conventional sources of energy. Experts believe that global warming and deteriorating environmental conditions are adversely affecting Pakistan’s water resources. The rivers are dying out at a slow but steady pace and with them, Pakistan’s chances of producing cheap hydropower are diminishing as well.
Although huge coal reserves that can be used for power generation and for resolving the prevalent power crisis have been discovered lately in Sindh, but mining these resources requires immense amounts of investment. Moreover, this is by no means an environment-friendly solution to the problem.
The most appropriate answer, according to some experts, is exploring renewable sources of energy such as wind, solar and even tidal energy. These not only have huge power-generation potential, but are also extremely environment-friendly and are successfully being used for electricity-generation in various countries of the world.
Unfortunately, not much research is being carried out in Pakistan for utilizing renewable sources of energy for power production. This is despite the fact that an Alternate Energy Development Board (AEDB) exists in the country. The purpose of this board is to raise awareness about renewable energy sources and to promote them in the country.
According to some other experts, the total solar energy available to the earth is approximately 3,850 ZetaJoules (ZJ) per year while the worldwide energy consumption was 0.571 ZJ in 2005.
Another area with respect to renewable energy resources is the exploration of wind power, the conversion of wind energy into electricity, using wind turbines. By the end of 2008, the worldwide capacity of wind-powered generators was 95.9 GigaWatts (GW).
Currently, wind produces just over one percent of worldwide electricity use, and accounts for approximately 19 percent of electricity production in Denmark, nine percent in Spain and Portugal, and six percent in Germany and the Republic of Ireland. Pakistan however, lags behind in this area as well, despite the fact that in neighbouring countries, such as India and China, the potential of wind power is successfully being used for electricity generation, albeit at a small scale. More importantly, extensive research is being carried out in this area in these countries.
Another area which needs the immediate attention of local authorities concerned is tidal power, also known as tidal energy. This is a form of hydropower that exploits the movement of water caused by tidal currents or the rise and fall in sea levels due to the tides.
Tidal power is yet to be widely used anywhere in the world, but it also has the potential for future electricity generation. Experts even believe that it is more profitable than wind energy and solar power.
In Pakistan, which has been gifted with over 700 kilometers of coastline, tidal power can prove to be a solution to the perpetual power crisis. In order to do that, however, authorities concerned will have to change their mindset and attitude towards emerging as well as environmental-friendly technologies.
Interestingly, at a time when extensive research is being carried out around the globe for finding cheap sources of energy, many people in Pakistan have not even heard of unconventional technologies being used elsewhere in the world. These include geothermal power, which also has the potential to contribute towards eliminating the persisting power crisis in the country.
Geothermal power is energy generated by heat stored under the Earth’s surface or the collection of absorbed heat in the atmosphere and oceans.
Similarly, biofuels, biomass and wave power are some other potential energy sources which need to be explored by authorities concerned, researchers, and investors, in order to provide electricity to far-flung and remote areas of the country, as well as to meet the growing demand of electricity for industrialization and agriculture.
Most importantly, thousands of tonnes of domestic waste produced daily produced in the country is poorly managed and is dumped without keeping in view its effects on the local environment. This waste can also be used for electricity production by using waste heat electricity generation technology. Even though this method would not be as environment-friendly as renewable energy sources, but it can help diminish the gap in demand and supply of the electricity to Pakistan.
Friday, August 14, 2009
Nokia providing low-cost durable cell phones
Azhar Bukhari talks with Nokia Care Manager Pakistan, Reza Burney to discuss future opportunities in telecom
It is the need of the hour to enable provision of affordable mobile phones for masses. We will soon collaborate with different cellular phone companies that can offer low-cost services along with a connection to bring to our customers a mobile phone package that would give true value for money.
This was the view point of Nokia Care Manager Pakistan and Afganistan, Reza Burney while exclusively talking to The Post.
Reza said that Nokia has introduced a network of showrooms bearing the name of Nokia Care Centre to provide convenience to Nokia mobile phone users all over the country. He maintained that the facility is currently in Karachi along with other major cities like Lahore, Faisalabad, Islamabad, Multan and more where mobile phones are serviced under the vigilance of highly-skilled and experienced engineers.
He said that Nokia Care has been operative in Pakistan for the past three years. Nokia Pakistan initiated this facility to offer reliable customer service to Nokia users all over Pakistan. To date, 85% Pakistani Nokia consumers have utilized their one-year warranty given to them by different dealers and got their damaged Nokia phones fixed by Nokia Care Centre where all mobile phones are repaired under the supervision of well-experienced engineers who repair mobile phones with the help of latest software which are then returned to Nokia Care customers.
Responding to a question, Reza Burney said that those cities in which Nokia Care is not physically present, Nokia customers are entertained by using the support of a reputable, local courier company that transports the damaged phones of the area to the Nokia Care Centre located in the nearest city. Once refurbished, the mobile phones are returned to customers by using the assistance of same courier company.
He added that cellular phone companies operating in Afghanistan have signed an agreement with Nokia that would make available to Afghani consumers affordable Nokia mobile phones that come pre-loaded with a connection to facilitate easy acquiring of a cell phone which has turned into an essential in today’s world of fast-moving technology. Nokia wants to provide the same ease of acquiring a cell phone for Pakistani consumers in just the same way. To make this possible, Nokia in Pakistan is already in talks with cellular phone companies.
Reza Burney further added that Nokia devices are the first preference of Asian as well as European citizens. Keeping this in mind, a complete range of latest and beautiful Nokia mobile phones belonging to different series are available in the market and need no introduction. All Nokia Care Centre services are completely online and performance details of every Nokia Care Centre are monitored by Nokia Company itself which is great news for customers.
Answering a question, Reza Burney said that apart from warranty claims, smuggled and stolen mobile phones are never repaired or serviced in any way because Nokia Mobile Phone Company wants to maintain its high-standards and reputation all over the world. After a short verification process, we even entertain those mobile phones at our Care Centers that have no warranty claim. We check such phones and try to fix them if possible. For this particular reason, we serve thousands of customers not in Karachi but all over the country. According to an estimate, currently each Nokia Care Centre is catering around four thousand Nokia mobile phone users in a timely and efficient manner.
Speaking about stolen mobile phones, Reza Burney said that cell phones that are stolen and reported to CPLC (Citizen Police Liaison Committee) by customers are brought to the notice of Nokia Care Centre. Using the IMEI number, which is a unique number to identify a cell phone, the stolen cell phone is remotely blocked and rendered futile for usage. All the details of such stolen cell phones are maintained online by Nokia Care Centre. The entire software system of Nokia Company is kept under high security and this, in essence, is the secret of our success. He maintained that along with promptly fixing the mobile phone brought to Nokia Care Centre by Nokia Customers, we also replace mobile phone parts such as LCDs and various kinds of ICs if required. Damaged mobile phone parts are replaced by our experienced engineers who repair the cell phone and make it ready for regular use. No compromise is made on quality standards while servicing a Nokia mobile phone because Nokia is renowned world over due to the high level of consumer confidence in Nokia products and services.
“To further strengthen consumer confidence and offer greater convenience to our consumers, Nokia will soon establish state-of-the-art labs in different mobile phone markets in Karachi.” Reza maintained that the facility will be equipped with the most advanced tools to fix Nokia phones that will be collected from the mobile phone market everyday.
He said that Pakistan is amongst the top priority countries for Nokia as it is now very much on the global map and up to the mark on everything that is happening in the world.
“Therefore, in Pakistan, the price band for mobile phones may be slightly smaller but there are people who have both the money and the desire for expensive gadgets and that is what we are targeting,” he maintained.
Raza said, Pakistan is a very critical market for Nokia and with a clear market leadership, Nokia has commitment to ensure that its customers are getting quality after sales service for their devices. Nokia Care centers are striving to achieve the objective of servicing the local market with the help of trained technicians backed by company original components, he added.
Burney said that the current era is all about who has the information first. Therefore nowadays people are spending a lot of time online and since they are globally connected at one time, information is at their fingertips. He elaborated that Nokia based their strategies on consumer needs and as marketing strategies were an evolutionary process, it also constantly evolved their techniques based on what the consumers were focusing on.
He believed that the new technologically advanced and expensive products were not creating an undesirable demand in the society but were rather catering to already existent needs of the consumers.
“If we don’t do it, somebody else will,” he further expressed.
Burney said at Nokia they ensured that their products were meaningful and had context rather than being just another expensive product in the market. He said that all their staff was trained in advance to provide after-sales services and customer care.
He said that yet consumers in Middle East and Africa are very conscious about the look of the mobile than the features that were available in it. He voiced that in Pakistan, consumers were more into colors being vibrant due to the bright traditional cultures here, while he added that in Europe, consumers preferred more conservative colors such as black and white.
Burney also put in that since Pakistan was an emerging market, bulk of the consumers segment were those who purchased low cost mobile phones whereas there was also a significant segment that did nothing except make or receive calls.
“Pakistan is following the trend of any emerging country but this time with the launch of N97, Pakistan is ahead of more developed countries,” he added. The Nokia Care Manager also spoke about the pirated versions of their mobile phones that cheated the consumers of their money.
“I feel very passionate and hurt when loyal customers get deceived which also damages the company’s name,” he said. “Because the government has imposed taxes that make no sense, consumers are paying the price, for this country is infested with the grey market,” he added.
He informed that to identify an original cell phone, mobile dealers have a number displayed in their stores which reads ‘SMS warranty check’. A consumer can send in the mobile’s IMEI number to the stated SMS number which would reply back saying that it had original warranty in Pakistan, which in turn help the consumer to identify an authentic mobile phone.
Raza said that Pakistan needs to reduce duties on cell phones to encourage original products to enter the country. He also said that one way to identify a fake was if the product was being sold for half the price, then consumers should be wary of it.
To a question regarding Nokia’s investments into the country, the Care Manager stated that Pakistan was a very important portfolio for the multinational company as with a significant population, it made a lucrative consumer market.
However, Nokia already had nine plants all over the world that were fulfilling their mobile phones demand in the market.
While applauding federal government’s efforts, Burney said that it is fully committed to the development of telecom sector and has taken a number of initiatives aimed at supporting the mobile sector to leverage its strength for growth of economy and social inclusion of all sections of population.
He said that Pakistan has become a destination for investments in IT and has attracted US$ 9 billion Foreign Direct Investment (FDI) which clearly reflects the confidence of the investors.
He said that telecom sector is a high potential area as more and more people are subscribing to the mobile telephone services.
It is the need of the hour to enable provision of affordable mobile phones for masses. We will soon collaborate with different cellular phone companies that can offer low-cost services along with a connection to bring to our customers a mobile phone package that would give true value for money.
This was the view point of Nokia Care Manager Pakistan and Afganistan, Reza Burney while exclusively talking to The Post.
Reza said that Nokia has introduced a network of showrooms bearing the name of Nokia Care Centre to provide convenience to Nokia mobile phone users all over the country. He maintained that the facility is currently in Karachi along with other major cities like Lahore, Faisalabad, Islamabad, Multan and more where mobile phones are serviced under the vigilance of highly-skilled and experienced engineers.
He said that Nokia Care has been operative in Pakistan for the past three years. Nokia Pakistan initiated this facility to offer reliable customer service to Nokia users all over Pakistan. To date, 85% Pakistani Nokia consumers have utilized their one-year warranty given to them by different dealers and got their damaged Nokia phones fixed by Nokia Care Centre where all mobile phones are repaired under the supervision of well-experienced engineers who repair mobile phones with the help of latest software which are then returned to Nokia Care customers.
Responding to a question, Reza Burney said that those cities in which Nokia Care is not physically present, Nokia customers are entertained by using the support of a reputable, local courier company that transports the damaged phones of the area to the Nokia Care Centre located in the nearest city. Once refurbished, the mobile phones are returned to customers by using the assistance of same courier company.
He added that cellular phone companies operating in Afghanistan have signed an agreement with Nokia that would make available to Afghani consumers affordable Nokia mobile phones that come pre-loaded with a connection to facilitate easy acquiring of a cell phone which has turned into an essential in today’s world of fast-moving technology. Nokia wants to provide the same ease of acquiring a cell phone for Pakistani consumers in just the same way. To make this possible, Nokia in Pakistan is already in talks with cellular phone companies.
Reza Burney further added that Nokia devices are the first preference of Asian as well as European citizens. Keeping this in mind, a complete range of latest and beautiful Nokia mobile phones belonging to different series are available in the market and need no introduction. All Nokia Care Centre services are completely online and performance details of every Nokia Care Centre are monitored by Nokia Company itself which is great news for customers.
Answering a question, Reza Burney said that apart from warranty claims, smuggled and stolen mobile phones are never repaired or serviced in any way because Nokia Mobile Phone Company wants to maintain its high-standards and reputation all over the world. After a short verification process, we even entertain those mobile phones at our Care Centers that have no warranty claim. We check such phones and try to fix them if possible. For this particular reason, we serve thousands of customers not in Karachi but all over the country. According to an estimate, currently each Nokia Care Centre is catering around four thousand Nokia mobile phone users in a timely and efficient manner.
Speaking about stolen mobile phones, Reza Burney said that cell phones that are stolen and reported to CPLC (Citizen Police Liaison Committee) by customers are brought to the notice of Nokia Care Centre. Using the IMEI number, which is a unique number to identify a cell phone, the stolen cell phone is remotely blocked and rendered futile for usage. All the details of such stolen cell phones are maintained online by Nokia Care Centre. The entire software system of Nokia Company is kept under high security and this, in essence, is the secret of our success. He maintained that along with promptly fixing the mobile phone brought to Nokia Care Centre by Nokia Customers, we also replace mobile phone parts such as LCDs and various kinds of ICs if required. Damaged mobile phone parts are replaced by our experienced engineers who repair the cell phone and make it ready for regular use. No compromise is made on quality standards while servicing a Nokia mobile phone because Nokia is renowned world over due to the high level of consumer confidence in Nokia products and services.
“To further strengthen consumer confidence and offer greater convenience to our consumers, Nokia will soon establish state-of-the-art labs in different mobile phone markets in Karachi.” Reza maintained that the facility will be equipped with the most advanced tools to fix Nokia phones that will be collected from the mobile phone market everyday.
He said that Pakistan is amongst the top priority countries for Nokia as it is now very much on the global map and up to the mark on everything that is happening in the world.
“Therefore, in Pakistan, the price band for mobile phones may be slightly smaller but there are people who have both the money and the desire for expensive gadgets and that is what we are targeting,” he maintained.
Raza said, Pakistan is a very critical market for Nokia and with a clear market leadership, Nokia has commitment to ensure that its customers are getting quality after sales service for their devices. Nokia Care centers are striving to achieve the objective of servicing the local market with the help of trained technicians backed by company original components, he added.
Burney said that the current era is all about who has the information first. Therefore nowadays people are spending a lot of time online and since they are globally connected at one time, information is at their fingertips. He elaborated that Nokia based their strategies on consumer needs and as marketing strategies were an evolutionary process, it also constantly evolved their techniques based on what the consumers were focusing on.
He believed that the new technologically advanced and expensive products were not creating an undesirable demand in the society but were rather catering to already existent needs of the consumers.
“If we don’t do it, somebody else will,” he further expressed.
Burney said at Nokia they ensured that their products were meaningful and had context rather than being just another expensive product in the market. He said that all their staff was trained in advance to provide after-sales services and customer care.
He said that yet consumers in Middle East and Africa are very conscious about the look of the mobile than the features that were available in it. He voiced that in Pakistan, consumers were more into colors being vibrant due to the bright traditional cultures here, while he added that in Europe, consumers preferred more conservative colors such as black and white.
Burney also put in that since Pakistan was an emerging market, bulk of the consumers segment were those who purchased low cost mobile phones whereas there was also a significant segment that did nothing except make or receive calls.
“Pakistan is following the trend of any emerging country but this time with the launch of N97, Pakistan is ahead of more developed countries,” he added. The Nokia Care Manager also spoke about the pirated versions of their mobile phones that cheated the consumers of their money.
“I feel very passionate and hurt when loyal customers get deceived which also damages the company’s name,” he said. “Because the government has imposed taxes that make no sense, consumers are paying the price, for this country is infested with the grey market,” he added.
He informed that to identify an original cell phone, mobile dealers have a number displayed in their stores which reads ‘SMS warranty check’. A consumer can send in the mobile’s IMEI number to the stated SMS number which would reply back saying that it had original warranty in Pakistan, which in turn help the consumer to identify an authentic mobile phone.
Raza said that Pakistan needs to reduce duties on cell phones to encourage original products to enter the country. He also said that one way to identify a fake was if the product was being sold for half the price, then consumers should be wary of it.
To a question regarding Nokia’s investments into the country, the Care Manager stated that Pakistan was a very important portfolio for the multinational company as with a significant population, it made a lucrative consumer market.
However, Nokia already had nine plants all over the world that were fulfilling their mobile phones demand in the market.
While applauding federal government’s efforts, Burney said that it is fully committed to the development of telecom sector and has taken a number of initiatives aimed at supporting the mobile sector to leverage its strength for growth of economy and social inclusion of all sections of population.
He said that Pakistan has become a destination for investments in IT and has attracted US$ 9 billion Foreign Direct Investment (FDI) which clearly reflects the confidence of the investors.
He said that telecom sector is a high potential area as more and more people are subscribing to the mobile telephone services.
Monday, August 3, 2009
No way out of increase in power tariff
by Azhar Bukhari
The countrymen, willingly or unwillingly, will have to pay Rs 12-14 per unit, if the government continues following the current electricity generation process, as 70 per cent of total power production is coming from thermal power plants either using Natural Gas or Furnace oil, while the cost of furnace oil for generating one unit of electricity is about Rs 16-18.
The experts of energy sector have revealed that total installed power production capacity in country is about 19,500 MW, out of which Hydel Power is only 6,000 MW, balance of 13,500 MW is thermal using Furnace Oil. Currently, total demand of power in country is stood at 15,000 MW and the production is varying between 11,000 to 12,000 MW, as the gap between demand and supply is of about 3,000 to 4,000 MW.
A prominent analyst on power issues, on the conditions of anonymity as he considers advocating increases in tariff could go wrong to his repute said either the present government nor the previous government was responsible for current power crisis, it was the entire electricity generation system which brought up an issue to a young crisis.
He said that a comparatively cheaper fossil fuel, natural gas was to be provided for 5,800 MW to various thermal plants, but in actual fact much less gas is being made available, the deficiency is being filled through high-cost furnace oil. It is worth to mention here that in the recent past, only furnace oil was used as fuel for about 9000 MW generation.
Current price of furnace oil is about Rs 39,500 to 40,000 per ton, which amounts upto Rs 39.5 per kg. On an average one kg of furnace oil produces 3.8 kWh of electricity. Therefore, one unit (kWh) of the electricity produced by all thermal plants using furnace oil is Rs 16 per unit. According to WAPDA/IPP agreement, the private power producers will charge WAPDA the actual fuel cost for which they have a direct contract with PSO.
Focusing only how to counter terrorism, the federal government is also constantly ignoring writing on the wall, which is clearly indicating that Pakistan has entered into an arena of power crisis. Admitting this reality, Prime Minister Gilani has told the countrymen that electricity was not such a thing which could be bought from the market it is to be generated and the process of electricity generation takes time. This is why the elected opposition is hesitant to stand with the people on the issue.
Thus, coping with energy problems is no longer a matter of days or months, even though the government would enhance the production yet it could not sustain current power tariff, as the only solution lies in complete overhauling of electricity generation structure.
However, the production cost of furnace oil electricity is Rs 16 per unit but adding to it the transmission, distribution cost (including loses), the total cost of such electricity works out to approximately Rs 20 per kWh. The difference between WAPDA tariff and the furnace oil electricity is Rs15 per kWh. It is estimated that the country consumes at least 27 billion units of electricity produced annually through furnace oil, which amounts to the total deficit of Rs 435 Billion. If WAPDA has to balance its books it would require a subsidy of Rs 435 Billion. This deficit is somewhat reduced due to cheap power produced through hydel energy and natural gas, but the deficit cannot change substantially, unless bulk of electricity is produced through hydel energy.
A deficit of Rs 300-350 Billion cannot be sustained, the government does not have resources to pay such a huge subsidy, the only remaining way to decrease the deficit is to increase the power tariff, which would not earn good name for the federal government and could also cost its regime. The cost of production is already high at red level in the country, if the government decide to further increase power tariff, it could reversely effect large scale manufacturing sector resulting more difficulties both for countrymen and the federal government.
In the absence of extremely heavy subsidy, WAPDA has to delay payments to IPPs and also to the oil companies. The result is that IPPs are now producing much less electricity than their capacity.
Thus Pakistan can’t afford electricity produced through oil, but interestingly Prime Minister, Yousaf Raza Gilani has directed Ministry of Water and Power to ensure daily delivery of 35,000 tons of furnace oil for power plants, which would cost Rs 41.475 billions per month.
According to the experts, another factor of increasing cost of power production is that the IPPs, and WAPDA owned thermal plants are averaging about 50 percent plant factor, as they are not being used to their potential level. It is estimated that 70 to 80 percent plant factor is quite feasible and require only better maintenance of such plants. Moreover, a higher plant factor on these power stations can provide 20 to 30 percent more energy, which could evade the current shortage to a certain extent. Improving the plant factor of the existing plants is far more economical than setting up new plants, although new plants will still be needed.
The current power crisis is grossly due to high dependency on precious fossil fuels, since the government is busy only to counter terrorism the country has to prepare itself at least for the next several years to cope with power crisis, as no immediate cheaper alternate solutions are available. The only residual way for the government to decrease both fiscal and WAPDA deficit is to increase the power tariff.
Moreover, prominent Hydel Projects have not been undertaken, neither the indigenous coal mining has started, investments in the existing as well as new gas field have been lacking. The policy orientation needs a drastic modification and indigenous resource like hydel energy production as well as development of coal mining and new gas fields should be the top priority.
The countrymen, willingly or unwillingly, will have to pay Rs 12-14 per unit, if the government continues following the current electricity generation process, as 70 per cent of total power production is coming from thermal power plants either using Natural Gas or Furnace oil, while the cost of furnace oil for generating one unit of electricity is about Rs 16-18.
The experts of energy sector have revealed that total installed power production capacity in country is about 19,500 MW, out of which Hydel Power is only 6,000 MW, balance of 13,500 MW is thermal using Furnace Oil. Currently, total demand of power in country is stood at 15,000 MW and the production is varying between 11,000 to 12,000 MW, as the gap between demand and supply is of about 3,000 to 4,000 MW.
A prominent analyst on power issues, on the conditions of anonymity as he considers advocating increases in tariff could go wrong to his repute said either the present government nor the previous government was responsible for current power crisis, it was the entire electricity generation system which brought up an issue to a young crisis.
He said that a comparatively cheaper fossil fuel, natural gas was to be provided for 5,800 MW to various thermal plants, but in actual fact much less gas is being made available, the deficiency is being filled through high-cost furnace oil. It is worth to mention here that in the recent past, only furnace oil was used as fuel for about 9000 MW generation.
Current price of furnace oil is about Rs 39,500 to 40,000 per ton, which amounts upto Rs 39.5 per kg. On an average one kg of furnace oil produces 3.8 kWh of electricity. Therefore, one unit (kWh) of the electricity produced by all thermal plants using furnace oil is Rs 16 per unit. According to WAPDA/IPP agreement, the private power producers will charge WAPDA the actual fuel cost for which they have a direct contract with PSO.
Focusing only how to counter terrorism, the federal government is also constantly ignoring writing on the wall, which is clearly indicating that Pakistan has entered into an arena of power crisis. Admitting this reality, Prime Minister Gilani has told the countrymen that electricity was not such a thing which could be bought from the market it is to be generated and the process of electricity generation takes time. This is why the elected opposition is hesitant to stand with the people on the issue.
Thus, coping with energy problems is no longer a matter of days or months, even though the government would enhance the production yet it could not sustain current power tariff, as the only solution lies in complete overhauling of electricity generation structure.
However, the production cost of furnace oil electricity is Rs 16 per unit but adding to it the transmission, distribution cost (including loses), the total cost of such electricity works out to approximately Rs 20 per kWh. The difference between WAPDA tariff and the furnace oil electricity is Rs15 per kWh. It is estimated that the country consumes at least 27 billion units of electricity produced annually through furnace oil, which amounts to the total deficit of Rs 435 Billion. If WAPDA has to balance its books it would require a subsidy of Rs 435 Billion. This deficit is somewhat reduced due to cheap power produced through hydel energy and natural gas, but the deficit cannot change substantially, unless bulk of electricity is produced through hydel energy.
A deficit of Rs 300-350 Billion cannot be sustained, the government does not have resources to pay such a huge subsidy, the only remaining way to decrease the deficit is to increase the power tariff, which would not earn good name for the federal government and could also cost its regime. The cost of production is already high at red level in the country, if the government decide to further increase power tariff, it could reversely effect large scale manufacturing sector resulting more difficulties both for countrymen and the federal government.
In the absence of extremely heavy subsidy, WAPDA has to delay payments to IPPs and also to the oil companies. The result is that IPPs are now producing much less electricity than their capacity.
Thus Pakistan can’t afford electricity produced through oil, but interestingly Prime Minister, Yousaf Raza Gilani has directed Ministry of Water and Power to ensure daily delivery of 35,000 tons of furnace oil for power plants, which would cost Rs 41.475 billions per month.
According to the experts, another factor of increasing cost of power production is that the IPPs, and WAPDA owned thermal plants are averaging about 50 percent plant factor, as they are not being used to their potential level. It is estimated that 70 to 80 percent plant factor is quite feasible and require only better maintenance of such plants. Moreover, a higher plant factor on these power stations can provide 20 to 30 percent more energy, which could evade the current shortage to a certain extent. Improving the plant factor of the existing plants is far more economical than setting up new plants, although new plants will still be needed.
The current power crisis is grossly due to high dependency on precious fossil fuels, since the government is busy only to counter terrorism the country has to prepare itself at least for the next several years to cope with power crisis, as no immediate cheaper alternate solutions are available. The only residual way for the government to decrease both fiscal and WAPDA deficit is to increase the power tariff.
Moreover, prominent Hydel Projects have not been undertaken, neither the indigenous coal mining has started, investments in the existing as well as new gas field have been lacking. The policy orientation needs a drastic modification and indigenous resource like hydel energy production as well as development of coal mining and new gas fields should be the top priority.
Tuesday, July 7, 2009
Textile industry, kicking the bucket
by Azhar Bukhari
Textile industry, kicking the bucket
Long-hours power outage, PKR decline trashing investment in textile sector
Share in total exports continues to fall off
Azhar Bukhari
The prolonging power crisis and significant decline in PKR against the US dollar, have smashed the investment in textile sector, as the share of textile exports in the total exports of the country has decreased to 50.2 percent from 62.6 percent.
A decade before, the textile export was at 80 percent of the total exports of the country. Despite enjoying subsidies worth over Rs 25 billion, the share of textile exports in the total exports of the country is continued to decrease.
According to a research study, more than 300 big and small textile and spinning units have been closed or merged after the martyred of former Prime Minister Benazir Bhutto. The industry has not been able to reap the benefits arising out of the depreciation of the rupee by 30 percent, and textile exports have registered a negative growth of 7.2 percent in the 3rd quarter of current fiscal year.
But on the other, when the food crisis is hitting the world’s major economies, here in Pakistan, without any government support, the share of non-textile exports have increased to 49.6 percent from 37.4 percent. The share of non-textile exports in the total exports of the country have increased to $2.730 billion in the Jan-March 2009.
Due to the unending power crisis, the local textile sector has not been able to develop its capacities and product development and meet international challenges.
The reliance of the local textile sector on textile quotas, duty drawback, refund and rebate culture has had a negative impact and its inefficiencies have exposed its capacity in the post-quota era.
In Pakistan, the textile sector commonly uses the locally produced cotton, yarn and raw materials and relies less on imports, but even than it has not been able to increase its exports at par with the last fiscal year. Experts in the government also argue that utility prices like gas, electricity and petroleum products have increased and are having a negative impact on all export-oriented industries.
The rupee witnessed a downslide soon after the Pakistan People’s Party-led government took charge of the affairs of the country. It depreciated from Rs 62 a dollar to Rs 80 a dollar during the last few months leaving export-oriented industries with no option to import or buy imported raw materials at higher costs.
In the recent past, the country’s exports have been witnessing marginal growth and imports have been registering sky rocketing increase, which has created balance of payment problems for the country. Availability of locally produced industrial raw materials would be the key to enhance country’s exports in future as the overall inflation and depreciation of rupee and rising power tariff would be limiting growth in exports.
The continued high prices of cotton yarn may cause a setback to the ongoing progress in the investment tempo of extensive-scale modernization replacement and expansion in the value-added section of the textile industry.
It is estimated that the export of one kg. of cotton yarn earns $2.70 as against which the similar quantity of cotton yarn/polyester fibre would earn $7.50 if exported after conversion into a value-added product. In order to achieve the best results on the textile front, it would be advisable that quotas may be imposed for the export cotton yarn so that the commodity could be made comfortably available to the value-added industry.
The demand for textiles in the world is around $21 trillion, which is likely to be increased by 6.5% in 2010. China is the leading Textile exporter of the world's total exports of US$ 500 billion in 2007. Country wise major market shasres of the textile exporting countries are: China: $ 55 billion, Hong Kong:$ 38 billion, Korea: $ 35 billion, Taiwan:$ 16 billion, Indonesia:$ 9 billion.
Though Pakistan has emerged as one of the major cotton textile product suppliers in the world market with a share of world yarn trade of about 30% and cotton fabric about 8%, having total export of $ 7.4 billion which accounts for only 1.2% of the over all share. Out of this Cotton fabric is 0.02%, Made-ups is 0.18% and Garments is 0.15%.
This is mainly due to the laxity towards the promotion of value added sector. Pakistan should learn a lesson from Bangladesh, which, by importing yarn and fabrics from Pakistan and other countries, has increased the export volume of Textiles made ups. If we desire to achieve the target of Textile Exports as envisaged in Textile Vision 2009, we will have to promote Value added sector in Textiles.
Role of textile industry in national economy
Textile products are a basic human requirement next only to food. This industrial sector in Pakistan has been playing a pivotal role in the national economy. Its share in the economy, in terms of GDP, exports, employment, foreign exchange earnings, investment and contribution to the value added industry; make it the single largest determinant of the growth in manufacturing sector. Textile share of over all manufacturing activity is 41%, export earning is 50.2%, value addition is 7% of GDP and as a provider of employment 32%.
In spite of the government's efforts to diversify exports as well as industrial base, the textile sector remains the backbone of industrial activity in the country.
Bottlenecks & deregulation strategy for investment
1. Poor infrastructure
2. Delay in sales tax refund causing serious cash flow / liquidity problem to the industry.
3. Pakistan's bad image portraited by the international media.
4. Adverse travelling advice by the foreign countries to their citizens discouraging travel to Pakistan.
5. Pakistan to sign international agreements, providing protection to intellectual property rights and international arbitration agreements.
6. Non-availability of good quality soft water for the textile industry.
7. Arrangements to provide Insurance guarantees to U.S. investors on their investment in Pakistan
Textile industry, kicking the bucket
Long-hours power outage, PKR decline trashing investment in textile sector
Share in total exports continues to fall off
Azhar Bukhari
The prolonging power crisis and significant decline in PKR against the US dollar, have smashed the investment in textile sector, as the share of textile exports in the total exports of the country has decreased to 50.2 percent from 62.6 percent.
A decade before, the textile export was at 80 percent of the total exports of the country. Despite enjoying subsidies worth over Rs 25 billion, the share of textile exports in the total exports of the country is continued to decrease.
According to a research study, more than 300 big and small textile and spinning units have been closed or merged after the martyred of former Prime Minister Benazir Bhutto. The industry has not been able to reap the benefits arising out of the depreciation of the rupee by 30 percent, and textile exports have registered a negative growth of 7.2 percent in the 3rd quarter of current fiscal year.
But on the other, when the food crisis is hitting the world’s major economies, here in Pakistan, without any government support, the share of non-textile exports have increased to 49.6 percent from 37.4 percent. The share of non-textile exports in the total exports of the country have increased to $2.730 billion in the Jan-March 2009.
Due to the unending power crisis, the local textile sector has not been able to develop its capacities and product development and meet international challenges.
The reliance of the local textile sector on textile quotas, duty drawback, refund and rebate culture has had a negative impact and its inefficiencies have exposed its capacity in the post-quota era.
In Pakistan, the textile sector commonly uses the locally produced cotton, yarn and raw materials and relies less on imports, but even than it has not been able to increase its exports at par with the last fiscal year. Experts in the government also argue that utility prices like gas, electricity and petroleum products have increased and are having a negative impact on all export-oriented industries.
The rupee witnessed a downslide soon after the Pakistan People’s Party-led government took charge of the affairs of the country. It depreciated from Rs 62 a dollar to Rs 80 a dollar during the last few months leaving export-oriented industries with no option to import or buy imported raw materials at higher costs.
In the recent past, the country’s exports have been witnessing marginal growth and imports have been registering sky rocketing increase, which has created balance of payment problems for the country. Availability of locally produced industrial raw materials would be the key to enhance country’s exports in future as the overall inflation and depreciation of rupee and rising power tariff would be limiting growth in exports.
The continued high prices of cotton yarn may cause a setback to the ongoing progress in the investment tempo of extensive-scale modernization replacement and expansion in the value-added section of the textile industry.
It is estimated that the export of one kg. of cotton yarn earns $2.70 as against which the similar quantity of cotton yarn/polyester fibre would earn $7.50 if exported after conversion into a value-added product. In order to achieve the best results on the textile front, it would be advisable that quotas may be imposed for the export cotton yarn so that the commodity could be made comfortably available to the value-added industry.
The demand for textiles in the world is around $21 trillion, which is likely to be increased by 6.5% in 2010. China is the leading Textile exporter of the world's total exports of US$ 500 billion in 2007. Country wise major market shasres of the textile exporting countries are: China: $ 55 billion, Hong Kong:$ 38 billion, Korea: $ 35 billion, Taiwan:$ 16 billion, Indonesia:$ 9 billion.
Though Pakistan has emerged as one of the major cotton textile product suppliers in the world market with a share of world yarn trade of about 30% and cotton fabric about 8%, having total export of $ 7.4 billion which accounts for only 1.2% of the over all share. Out of this Cotton fabric is 0.02%, Made-ups is 0.18% and Garments is 0.15%.
This is mainly due to the laxity towards the promotion of value added sector. Pakistan should learn a lesson from Bangladesh, which, by importing yarn and fabrics from Pakistan and other countries, has increased the export volume of Textiles made ups. If we desire to achieve the target of Textile Exports as envisaged in Textile Vision 2009, we will have to promote Value added sector in Textiles.
Role of textile industry in national economy
Textile products are a basic human requirement next only to food. This industrial sector in Pakistan has been playing a pivotal role in the national economy. Its share in the economy, in terms of GDP, exports, employment, foreign exchange earnings, investment and contribution to the value added industry; make it the single largest determinant of the growth in manufacturing sector. Textile share of over all manufacturing activity is 41%, export earning is 50.2%, value addition is 7% of GDP and as a provider of employment 32%.
In spite of the government's efforts to diversify exports as well as industrial base, the textile sector remains the backbone of industrial activity in the country.
Bottlenecks & deregulation strategy for investment
1. Poor infrastructure
2. Delay in sales tax refund causing serious cash flow / liquidity problem to the industry.
3. Pakistan's bad image portraited by the international media.
4. Adverse travelling advice by the foreign countries to their citizens discouraging travel to Pakistan.
5. Pakistan to sign international agreements, providing protection to intellectual property rights and international arbitration agreements.
6. Non-availability of good quality soft water for the textile industry.
7. Arrangements to provide Insurance guarantees to U.S. investors on their investment in Pakistan
Cost overrun, a setback for construction sector
Cost overrun, a setback for construction sector
Azhar Bukhari
Cost overrun is a very frequent phenomenon in country’s construction sector and is almost associated with all projects of construction industry. A research study has revealed that 9 out of 10 projects had overrun.
World commodity prices for basic materials, the current state of the local economy, the quality of materials and poor supply and demand have contributed to dramatic price fluctuations in the sector.
At the time when masses are facing sever power crisis and ever increasing inflation rate, it is a pipe dream for common men to buy a house for their families.
In big cities like Lahore, Faisalabad, Karachi, Quetta etc, a large population is residing at rent making the cities very congested place. To overcome the shortage of housing units, the town planning and management departments, without following the rules, have granted licenses for establishing housing schemes to every Tom, Dick and Harry, which have made the situation more critical.
It is learnt that 80 out of 100 housing schemes are either fake or hide the facts. However, all the field is not barren, as few developers like Eden Developers, Lake City, Bahria Town, Urban Developers, TajMahal Marketing and Wocland International are still providing low-cost housing units both in cash and installments. Busy in metro life, a common man prefer to buy a unit in housing scheme to save time and money as well.
In Pakistan, construction sector is an important sector although not working to its fullest potential but still of prime significance to the country. Growth in this sector is critical for growth in national income as it is among the largest sectors that generates employment within the country as well as a key driver for economic development of Pakistan. Like many other developing countries, Pakistan is also facing critical project management related issues among which cost overrun is quite prominent.
A research study has indicated that the majority of cost overrun factors (88%) lie in medium severity impact zone, signifying that major attention needs to be given to these factors as they collectively cause considerable cost overrun. It is evident from the findings that both internal and external aspects of business setting are present as the prime contributors to cost overruns.
According to the study, the major cost overrun factors were fluctuation in prices of raw materials, unstable cost of manufactured materials, high cost of machineries, poor project (site) management, incorrect/ inappropriate methods of cost estimation, additional work, improper planning, and unsupportive government policies.
Cost has its proven importance as the prime factor for project success. A completed project may not be regarded as a successful endeavor until and unless it satisfies the cost limitations applied to it.
Management Factors
Some cost overruns are unavoidable because they cannot be reasonably prevented, such as those due to unanticipated events, however overruns due to design plan or project management problems are avoidable because they could have reasonably been foreseen and prevented. The project control procedure can help management identify its current position related to a future position.
Majority of constructors are small players who have weak financial positions, out-dated labour-intensive technology and poor organizational structures.
It is need of the hour to encourage investment in the real estate sector and facilitate the developers like Eden, Wocland, Bahria Town, TajMahal, Urban Developers etc which are establishing modern housing schemes with all basic facilities for a common man.
Approximate construction material prices in Lahore market
during April 2009
Construction including material per square ft Rs 1250 to 1500
Labour cost without material per square ft Rs 150 to 200
Electricity & Plumbing per square ft Rs 10 each
Cement bag Rs 325
Stone crush Rs 40 per square ft
Sand Truck Rs 12,000
Bathroom Tiles Rs 300 to 1200 per square meter
Marble Rs 20 to 80 per square ft
Bricks Rs 3600 to 4000 per 1000
Approximate covered area for single storey house
5 Marla 1125 square ft
10 Marla 1800 square ft
1 Kanal 3200-3600
Azhar Bukhari
Cost overrun is a very frequent phenomenon in country’s construction sector and is almost associated with all projects of construction industry. A research study has revealed that 9 out of 10 projects had overrun.
World commodity prices for basic materials, the current state of the local economy, the quality of materials and poor supply and demand have contributed to dramatic price fluctuations in the sector.
At the time when masses are facing sever power crisis and ever increasing inflation rate, it is a pipe dream for common men to buy a house for their families.
In big cities like Lahore, Faisalabad, Karachi, Quetta etc, a large population is residing at rent making the cities very congested place. To overcome the shortage of housing units, the town planning and management departments, without following the rules, have granted licenses for establishing housing schemes to every Tom, Dick and Harry, which have made the situation more critical.
It is learnt that 80 out of 100 housing schemes are either fake or hide the facts. However, all the field is not barren, as few developers like Eden Developers, Lake City, Bahria Town, Urban Developers, TajMahal Marketing and Wocland International are still providing low-cost housing units both in cash and installments. Busy in metro life, a common man prefer to buy a unit in housing scheme to save time and money as well.
In Pakistan, construction sector is an important sector although not working to its fullest potential but still of prime significance to the country. Growth in this sector is critical for growth in national income as it is among the largest sectors that generates employment within the country as well as a key driver for economic development of Pakistan. Like many other developing countries, Pakistan is also facing critical project management related issues among which cost overrun is quite prominent.
A research study has indicated that the majority of cost overrun factors (88%) lie in medium severity impact zone, signifying that major attention needs to be given to these factors as they collectively cause considerable cost overrun. It is evident from the findings that both internal and external aspects of business setting are present as the prime contributors to cost overruns.
According to the study, the major cost overrun factors were fluctuation in prices of raw materials, unstable cost of manufactured materials, high cost of machineries, poor project (site) management, incorrect/ inappropriate methods of cost estimation, additional work, improper planning, and unsupportive government policies.
Cost has its proven importance as the prime factor for project success. A completed project may not be regarded as a successful endeavor until and unless it satisfies the cost limitations applied to it.
Management Factors
Some cost overruns are unavoidable because they cannot be reasonably prevented, such as those due to unanticipated events, however overruns due to design plan or project management problems are avoidable because they could have reasonably been foreseen and prevented. The project control procedure can help management identify its current position related to a future position.
Majority of constructors are small players who have weak financial positions, out-dated labour-intensive technology and poor organizational structures.
It is need of the hour to encourage investment in the real estate sector and facilitate the developers like Eden, Wocland, Bahria Town, TajMahal, Urban Developers etc which are establishing modern housing schemes with all basic facilities for a common man.
Approximate construction material prices in Lahore market
during April 2009
Construction including material per square ft Rs 1250 to 1500
Labour cost without material per square ft Rs 150 to 200
Electricity & Plumbing per square ft Rs 10 each
Cement bag Rs 325
Stone crush Rs 40 per square ft
Sand Truck Rs 12,000
Bathroom Tiles Rs 300 to 1200 per square meter
Marble Rs 20 to 80 per square ft
Bricks Rs 3600 to 4000 per 1000
Approximate covered area for single storey house
5 Marla 1125 square ft
10 Marla 1800 square ft
1 Kanal 3200-3600
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