Effective electricity prices induce business community to expand business which results in employment generation. In contrast, business class in Pakistan bears the highest electricity tariffs as compared to its competitor countries (Weynand, 2007). All the new investment might seek some other avenues, to run a competitive business, because it would not be optimal to run business in Pakistan. This is a worrying state and requires the serious attention of the policy makers.
Electricity deficit must not be encounter just with short-term electricity production by IPPs but some long-term planning is required. Nature has blessed Pakistan generously with water resources, but unfortunately 13 percent of our water flow from rivers can be stored. In addition, rising sedimentation is also reducing the storage capacity in dams. Against the hydropower potential (that is more than 100,000 MW, acknowledged sites of 55,000 MW5), Pakistan is just producing 6,599 MW electricity from hydropower (Mirza et al., 2008). Just from the Indus River, 10 million acre feet of water is squandered in sea every year. Many projects are in pipeline, Diamer Basha, Bunji and Kohala are some notable spots which have the capacity of 4,500 MW, 7,100 MW and 1,100 MW respectively. Pakistan is direly in need of consistent policies for the completion of these dams to produce cheap electricity for her people. Rising electricity demand necessitates the completion of these ventures to keep a pace with the world in development.
The pity is that hydel:thermal mix for electricity generation is 34:66 which is against the ideal mix of hydel:thermal. In simple words, for a developing oil importing country like Pakistan, it is not a sustainable policy to generate electricity form imported
5 See Hydro potential in Pakistan (2010).
oil because most of its foreign revenues are consumed for the purchase of crude oil.
Thermal power plants, operated by IPPs, can overwhelm the load-shedding for short-term but it also resulting in mounting tariffs. Such high tariff rates are evading the economic growth, and investment is moving to foreign heavens. Competitive electricity can be produced with the help of hydropower which requires just some serious and persistent efforts.
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