ManuZ
FULL MEMBER
- Joined
- Jan 21, 2012
- Messages
- 448
- Reaction score
- 0
- Country
- Location
India may not be able to sell electricity to Pakistan, after all!
This was supposed to be the mother of all CBMs (Confidence Building Measures) for the United Progressive Alliance (UPA) led by Prime Minister Manmohan Singh. The UPA government planned to sell 500 mw of power to Pakistan, currently hit by unprecedented energy crisis.
The proposed move also gives an interesting and significant peep into the economies of the two nuclear-armed neighbours, traditionally infamous for their Tom- and-Jerry kind of relationship over the decades.
Fourteen years ago, Pakistan wanted to sell electricity to India. Many meetings had taken place between experts at that time when Atal Bihari Vajpayee and Nawaj Sharif were at the helm of the affairs in India and Pakistan respectively. Queerly, the quantum of the electricity to be sold was exactly the same: 500 mw.
The tables have turned now. Sharif, on his return to power as a record third time prime minister after a gap of 14 years, finds himself negotiating for a similar power load. The only difference this time is that today Pakistan is negotiating for “importing” 500 mw of power from India rather than exporting it to India.
Now let’s turn back to the original theme of this article after this meandering!
The Indian plan of selling power to Pakistan (whether 500 mw or whatever) is all set to be just a pipe dream. The reason? It’s economics, stupid!
Even before Sharif’s former installation as the third time premier of Pakistan, the UPA government in New Delhi had expressed a desire to bail out Pakistan from its current energy crisis by selling power at “commercial rates’ which were presumed to be cheaper than the market rates anywhere else for Pakistan.
But this premise has gone awry.
Soon after Nawaz Sharif emerged victorious in the 11 May 2013 elections and well before his swearing in as prime minister, he expressed desire to revive the so-called energy talks. The only difference this time, as highlighted earlier, was that Pakistan was a wannabe importer of electricity from India, not exporter like a decade ago.
The Manmohan Singh government obliged him immediately and dispatched an official delegation to Pakistan, led by Joint Secretary (Power) Rita Acharya, to discuss broad contours of the proposed arrangement.
The Indian delegation came back with a report that was a reality check for both Manmohan Singh and Nawaz Sharif. It determined that a lot of homework, and expensive one, will have to be done before any such arrangement of selling power to Pakistan on “commercial rates” (as Indian government repeatedly stressed) were to be put in place.
The Indian Power Ministry has told the government that as per its ‘initial estimates”, Pakistan government will have to spend Rs 700 crore on its side to build infrastructure like receiving stations, high-voltage direct current (HVDC) transmission line and a dedicated grid.
It determined that the Indian side too will have to shell out Rs 100 crore to transmit electricity from Patti grid in Punjab to Wagah border. The monetary burden on Pakistan is all the more as all the monies discussed in the Indian Power Ministry report to the Government of India are in Indian Rupees, a stronger currency than the Pakistani Rupee.
Moreover, the Power Ministry report made it clear that it will take at least three to four years to set up the technical pre-requisites before Indian exports of electricity to Pakistan actually start.
Perhaps the most damning dampener to have come from the Indian Power Ministry’s preliminary talks with the Pakistani government is that the cost of electricity per unit would come to a minimum of Rs 14.
But wait! Even if the two governments were to okay it, the cost of India-exported electricity for Pakistani citizens would be much more than Rs 14 per unit. Why? Because given the political distrust between India and Pakistan, India would be averse to a government-to-government dealing in this business of electricity exports!
The Indians laid a pre-condition that Pakistan will have to purchase the electricity through an Indian contractor, who will purchase electricity on form the Power Grid Corporation (PGC) and then transmit it to Pakistan.
Thus, the Manmohan Singh government’s plans to strike an emotive chord in the hearts of Pakistani citizens by bailing out their country from its worst-ever energy crisis have hit a wall. As per official estimates of Pakistan, the country has lostRs one lakh croredue to load-shedding over the last five years.
Now the current status of the Manmohan Singh’s government’s ambitious Pakistan diplomacy is as follows. The Power Ministry has written to the government and inquired if the project is of strategic importance, it will devise ways and means of finding a way out.
Last heard, the ball is resting in the office of National Security Advisor Shivshankar Menon.
Perhaps it is time for the UPA government to throw some light on this!
http://www.firstpost.com/economy/why-india-cant-sell-electricity-to-pakistan-after-all-947277.html
This was supposed to be the mother of all CBMs (Confidence Building Measures) for the United Progressive Alliance (UPA) led by Prime Minister Manmohan Singh. The UPA government planned to sell 500 mw of power to Pakistan, currently hit by unprecedented energy crisis.
The proposed move also gives an interesting and significant peep into the economies of the two nuclear-armed neighbours, traditionally infamous for their Tom- and-Jerry kind of relationship over the decades.
Fourteen years ago, Pakistan wanted to sell electricity to India. Many meetings had taken place between experts at that time when Atal Bihari Vajpayee and Nawaj Sharif were at the helm of the affairs in India and Pakistan respectively. Queerly, the quantum of the electricity to be sold was exactly the same: 500 mw.
The tables have turned now. Sharif, on his return to power as a record third time prime minister after a gap of 14 years, finds himself negotiating for a similar power load. The only difference this time is that today Pakistan is negotiating for “importing” 500 mw of power from India rather than exporting it to India.
Now let’s turn back to the original theme of this article after this meandering!
The Indian plan of selling power to Pakistan (whether 500 mw or whatever) is all set to be just a pipe dream. The reason? It’s economics, stupid!
Even before Sharif’s former installation as the third time premier of Pakistan, the UPA government in New Delhi had expressed a desire to bail out Pakistan from its current energy crisis by selling power at “commercial rates’ which were presumed to be cheaper than the market rates anywhere else for Pakistan.
But this premise has gone awry.
Soon after Nawaz Sharif emerged victorious in the 11 May 2013 elections and well before his swearing in as prime minister, he expressed desire to revive the so-called energy talks. The only difference this time, as highlighted earlier, was that Pakistan was a wannabe importer of electricity from India, not exporter like a decade ago.
The Manmohan Singh government obliged him immediately and dispatched an official delegation to Pakistan, led by Joint Secretary (Power) Rita Acharya, to discuss broad contours of the proposed arrangement.
The Indian delegation came back with a report that was a reality check for both Manmohan Singh and Nawaz Sharif. It determined that a lot of homework, and expensive one, will have to be done before any such arrangement of selling power to Pakistan on “commercial rates” (as Indian government repeatedly stressed) were to be put in place.
The Indian Power Ministry has told the government that as per its ‘initial estimates”, Pakistan government will have to spend Rs 700 crore on its side to build infrastructure like receiving stations, high-voltage direct current (HVDC) transmission line and a dedicated grid.
It determined that the Indian side too will have to shell out Rs 100 crore to transmit electricity from Patti grid in Punjab to Wagah border. The monetary burden on Pakistan is all the more as all the monies discussed in the Indian Power Ministry report to the Government of India are in Indian Rupees, a stronger currency than the Pakistani Rupee.
Moreover, the Power Ministry report made it clear that it will take at least three to four years to set up the technical pre-requisites before Indian exports of electricity to Pakistan actually start.
Perhaps the most damning dampener to have come from the Indian Power Ministry’s preliminary talks with the Pakistani government is that the cost of electricity per unit would come to a minimum of Rs 14.
But wait! Even if the two governments were to okay it, the cost of India-exported electricity for Pakistani citizens would be much more than Rs 14 per unit. Why? Because given the political distrust between India and Pakistan, India would be averse to a government-to-government dealing in this business of electricity exports!
The Indians laid a pre-condition that Pakistan will have to purchase the electricity through an Indian contractor, who will purchase electricity on form the Power Grid Corporation (PGC) and then transmit it to Pakistan.
Thus, the Manmohan Singh government’s plans to strike an emotive chord in the hearts of Pakistani citizens by bailing out their country from its worst-ever energy crisis have hit a wall. As per official estimates of Pakistan, the country has lostRs one lakh croredue to load-shedding over the last five years.
Now the current status of the Manmohan Singh’s government’s ambitious Pakistan diplomacy is as follows. The Power Ministry has written to the government and inquired if the project is of strategic importance, it will devise ways and means of finding a way out.
Last heard, the ball is resting in the office of National Security Advisor Shivshankar Menon.
Perhaps it is time for the UPA government to throw some light on this!
http://www.firstpost.com/economy/why-india-cant-sell-electricity-to-pakistan-after-all-947277.html
