Miftah Ismail

Two-part electricity tariffs are a proven way to lower power costs — economists have argued this for decades. Pakistan should act now. My column in The News: https://www.thenews.pk/print/1417520-the-two-tariff-solution

Eid Mubarak.

I wrote a tweet on Sunday arguing against ISMO’s plan for the installation of 26,000 MW additional power in Pakistan (including 12,000 MW of private sector solar) and transmission lines to cater to this additional capacity. The cost of these projects is estimated at US$57 bn.

At this point we already have substantial excess capacity and adding even a watt of more capacity would be madness. It is wrong to add any capacity in the public sector or based on government guarantees even as government is belatedly trying to privatise and get out of this sector. We have suffered more than enough and continue to suffer from such past mistakes.

Two mistakes we have made in the past, especially between 2013-2017, was to instal power generation with bidding. This didn’t allow proper price discovery. (In his brief tenure as PM, Shahid Khaqan Abbasi mandated bidding for setting up power plants but the rule was again reverted to NEPRA-determined price by Imran Khan). This meant that power plants set up between 2013-2017 could have been cheaper (except the LNG plants where there was bidding).

The second and more significant mistake was to not undertake external (foreign exchange) viability of these projects, both individually and as a whole. When out government set up 20,000 MW generation at a cost of say $40 bn and it then had to repay these loans in 10 years, then just the capacity cost come around US$6 bn. The government never studied or figured out where that extra $6 bn was going to come from. And when capacity cost plus imported fuel costs were added together, the strain on foreign currency reserves was so severe, the rupee tumbled in value and there is high inflation .

So it is easy for governments to borrow and undertake projects (except for PPP, who are unable to complete anything). But we always have to be mindful that we have to return that foreign currency loan.

Before the next ISMO plan is submitted, I hope they will also do an analysis of how much foreign exchange is needed and where would that come from? And how would we service the debt. And would this additional capacity help increase exports or because it will force even higher tariffs will end up reducing exports.

I hope all of you have a wonderful Eid with your families and loved ones.

Eid ul Adha instills in us the true spirit of selflessness, service, sacrifice, and collective responsibility. This blessed day reminds us that nations are built on unity, justice, and a strong economy.

We pray that Allah Almighty grants Pakistan economic stability, progress, prosperity, and peace, and opens the doors of ease and mercy for the entire Muslim Ummah.

Eid Mubarak.

Awaam Pakistan strongly condemns, in unequivocal terms, the cowardly terrorist attack in Quetta. Our hearts and prayers are with the martyrs, the injured, and their families. InshaAllah, Pakistan will emerge stronger from this horrific tragedy.

https://youtu.be/xmRyBKNM4BE

Miftah Ismail Read 7 Principles of Awaam Pakistan | Vision for Awaam Pakistan | Karachi Speech Miftah Ismail delivered an important talk at Dadabhoy Institute in Karachi, where he outlined the 7 core principles of Awaam Pakistan.These principles focus ...

https://youtu.be/tLSK2icGQho

Miftah Ismail Miftah Ismail’s Powerful Speech in Karachi | Roads, Heavy Taxes & Rising Costs Exposed