Industrialize or Perish (a primer)

Pakistan's Dilemma

Industrialize or Perish ( a primer )

Suleman N. Khan (28 March 2008)

Convener, Water Resource Development

Council & National Conference on Water Reservoirs

in the National Economy” held 09 Feb 1998

Fellow, Institution of Electrical and Electronic

Engineers of Pakistan (IEEEP)





Pg No.





A Note



Part I :     The Facts are that



Part II :   The short and medium term solutions



Part IIIConclusion






     Mr. S.S. Kirmanis fax of 4 Feb 98



     PMs Office Directive 24 Oct 98



     Press Release HUBCO Summary of 29 Nov 99



      WAPDA letter of 26 June 04



     Letters of Lt. Gen Dr. G.S Butt to the President



 a)  02 June 04



 b)  09 July 04



c)     18 Nov 04


WRDC circular letter 001 of 15 March 08 & 002 of  06 Nov 08 may also be read at Web Address <>

Extract from David E. Lilienthals article ANOTHER KOREA IN THE MAKING?  as sent by Mr. Eugene R. Black President IBRD with his letter of 06 Sep. 1951 to Prime Minister Liaqat Ali Khan of Pakistan:
"Why the flow of the Punjab's lifeblood was so carelessly handled in the partition no one seems to know. Pakistan includes some of the most productive food-growing lands in the world in western Punjab (the Kipling country) and the Sind.  But without water for irrigation this would be desert. 20,000,000 acres would dry up in a week, tens of millions would starve. No army, with bombs and shellfire, could devastate a land as thoroughly as Pakistan could be devastated by the simple expedient of India's permanently shutting off the sources of water that keep the fields and the people of Pakistan alive"..........
 “The partition gave the major part of the irrigated lands of the Punjab and Sind to Pakistan; but the headwaters of some of largest irrigation canals that feed Pakistan where left with India or Kashmir. All the rivers upon which Pakistan depends for life originate in India or Kashmir. Two thirds of the entire water supply originates in Kashmir where the snow-fed Indus rises”.

Industrialize or Perish (a primer)
Preamble:  A sinner like myself can be sometimes motivated to speak out against tyranny and serious blunders by compatriots. It was in Feb 94 when Mr. Mustafa Khar the newly appointed Federal Minister for Water & Power of the PPP government made his maiden appearance to preside at a seminar in the WAPDA Auditorium. The occasion was the presentation of the new Private Power Policy draft; its highlights & objectives. My class fellow from UET Lahore, the late Mr. Tanvir Azhar was conducting. Tanvir was indeed a brilliant electrical engineer & mathematician. He had rapidly risen to the level of General Manger in Nespak. The Energy Czar of the PPP government Mr. Shahid Hassan Khan had nominated Tanvir as the first Director General of the Private Power & Infrastructure Board (PPIB) Islamabad. Tanvir’s book ‘Quest for Power” was an excellent treatise of his mathematical skills and his power system control & data acquisition work at Nespak for the WAPDA network. One had been aware of the basic recommendations of the TASK FORCE on Energy (Jan 94). My serious concern was that any new power policy which is uncapped will destabilize WAPDA eventually the national economy & ultimately damage the Federation. One was also aware that OECD Helsinki Accord of August 1992 was the pretext for radical changes in financing of public sector infrastructure including power systems and had brought along my article ‘Statement on Electric Power’. In the recess Tanvir read it. He said “Suleman this is a meaty article but we have decided that WAPDA has to be dismantled and privatized. The new Power Policy to be announced next month (March 94) will be inviting Independent Power Producers (IPPs) and the ban on WAPDA constructing new thermal power stations will remain”. I grumbled that the Hub Power Agreement of August 92 has been made even more unsustainable after PPP’s new government appointed Mr. Shahid Hassan Khan its Energy Adviser. The Hub project was now being blessed with its progeny before the impact of its Power Purchase Agreement (PPA) is assessed. The oil import lobby was clearly winning. Tanvir, God bless his soul, was commercially naïve.

We learnt that Pakistan was adopting the California model of IPPs but with radical changes i.e it was being made unsustainably generous. The California model inflicted great damage to the economy of California within the 90’s decade. Some of us observed that the 1994 Private Power Policy was an evil on the scale of the Agartala Conspiracy which had resulted in East Pakistan’s separation from Pakistan. We formed a small group of rebels who were writing & speaking at every forum & venue. Uetians of my era looked at Prof. Malik M. Anwar as an icon of wisdom & patriotism. He had left Lahore in the mid 70’s to pursue his doctoral studies at MIT. The advice of this sage from Boston was “the new East India Company has arrived”.  In Nov 1996 I circulated an essay  “Industrialize or Perish”. It covered all aspects of the economy i.e Industrialization, Technology, Irrigation system and the Energy mix. Friends asked me to compile it as a detailed study, basically in a book form.  I set about this task ten years late and hope to complete it within 2008. The desperate economic situation that has engulfed Pakistan in 2007 compelled me to urgently create a condensed form which is presented here.  Hopefully you will agree with Edward Burke “The only thing for evil to triumph is for good men to do nothing”. I salute the wisdom of my guides; late Engr. Dr. Alfred Gerber who educated me on the potential of the Pak economy and late Engr. Dr. Ghulam Safdar Butt (Lt. Gen. Rtd) who made the international conference of 9 Feb 98 possible and was an inspiration till his passing away in early 2006. I also salute the courage of several patriots including Mr. Hidayatullah whose conscience reportedly resulted in his exit as auditor of Hub Power Co. Mr. Aziz Qureshi an ex-banker who was the moving spirit in WAPDA’s short –lived legal challenge to Hub Power Co’s indiscretions allegedly committed in their first 2 years of operations (1996-98). Mr. Salahuddin Rifai former G.M WAPDA / NTDC who ensured economic despatch without fear & favour. The rogues can also be identified. Above all the Indian factor emerges very strongly.

 It was on 09 Feb 98 that our nascent NGO (Water Resource Development Council) convened a conference  on Water Reservoirs in the National Economy at Islamabad. The morning session was presided by the Prime Minister and during the full days discussion all major aspects of our predominantly irrigated agriculture hydro energy potential and related aspects were addressed. The legendary S.S Kirmani Sahib was unable to attend but his kind fax message was read out. Three months later he was summoned by the Creator . His message remains most relevant. The guest from Turkey Mr. Aker made an inspiring analysis of the Greater Anatolian Project (GAP). An enlightening talk was given by Dr. Peter Grein of Switzerland on desilting of reservoirs and his experiences in China.  Our NGO was privileged to have presented late Maj. Gen. (Rtd) Fazle Raziq late Lt. Gen (Rtd) Dr. Ghulam Safdar Butt and Engr. Hissamuddin Bangash. The guest speaker Engr. Khalid Mohtadullah (Member Water WAPDA) had discussed the benefits of reservoir construction and explained the details of the IBIS (Indus Basin Irrigation System). There was a prolific technical session in the afternoon presided by eminent irrigation engineer of Sindh Mr. Elahi Buskh Soomro then Speaker of the National Assembly. The expected pit-falls in the building of Diamer -Bhasha and the near impossible status of Katzarah/Yago/Skardu on humanitarian and ecological grounds were also deliberated by several experts. A resolution was unanimously approved by the delegates for the construction of atleast one reservoir on the Indus without further loss of time. Everyone agreed that some 16 years had already been lost as 10 years after Tarbela (1974) a new reservoirs construction should have started and would have been available by 1990. In financial terms a staggering wastage of around USD 200Bn equivalent between 1990 and 2007 due to non-availability of a second reservoir on the Indus that could have kept our economic growth far ahead of our population increase. A near hopeless sociological situation as experienced today would have been averted.
The arbitrary private thermal power policy of 1994 based primarily on imported oil after imposing a ban on increased public sector generation was a national tragedy. Let us now discuss the rising menace of India’s Northern Canal Project. What this USD 200Bn + project means for the future of our children. The real implications of Baghliar Dam, Kishinganga Barrage and the infrastructure on the Wullar Lake. Being in the peace mode we should surely advocate a peaceful accord. There has to be a consensus internally and thereafter a recognition by the world community of our historical apprehension that Kashmir is a water related issue. Since 1947 we have failed to surmount the Indian factor. India must respect in letter and spirit the tenets of the “Indus Waters Treaty 1960”. It is sacrosanct. Tragically the Indians are now guilty of laying the groundwork for genocide of our nation through the ongoing theft of Pakistan waters.
The sustainable solutions of the energy, industrial, agricultural and social crises are presented in outline. Why did PM Shaukat Aziz again block WAPDA in 2005/06 from building 2000MW of thermal power based on combined cycle P.S (gas fired) after allowing their construction in 2004? Above all why he was hostile to construction of hydro-electric (hydel) power stations on fast-track basis. MoUs were signed with top PRC corps in the presence of the President He blocked and cynically derailed hydel run-of-the-river projects (primarily in the public sector) during the period 2003/04/05. He also argued that loans from EXIM China above 5% pa are not acceptable. This was the period this banker turned emperor could not appreciate the large macro-economic picture. He actually scuttled US 2 cent hydel projects (zero fuel pass through costs) on the untenable basis of  supplier credit interest rates being 5.5% pa against his demand of 5% pa (or lower).  The NPV of the hydel projects he blocked are many multiples superior to the private oil based projects he supported. On 7 Jan 04 as Finance Minister presiding over an ECNEC/ECC he declared “let us stop this culture of Mouization”. Most took it as a reference to Chairman Mao” This smooth talking banker acting as an economist ensured that Pakistan is held hostage to the oil lobby. A fatal embrace after the escalation of oil prices. Mr. Aziz forgot that in May 2000 he had gone to Beijing, cap-in-hand, for a roll-over of USD500 mn which was the bulk of Pakistan’s Forex Reserves. Why did HUBCO an IPP capable of 1292MW produce around 300MW during the critical weeks of Dec 07 and Jan 08? They may have been within the parameters of their agreement but was this act fair to Pakistan? Why Mr. Ghait Pharon was allowed to control the rate of bitumen due to his takeover of the National Refinery? He already controlled Attock Oil Refinery. Why did Mr. Shaukat Aziz snub the Textile sector when they asked for a life sustaining subsidy? Why did national plans such as the 1994 National Power Plan go into cold storage? I should not be raising these queries because after all Mr. Shaukat Aziz had arbitrarily withdrawn WAPDA’s legal suit against HUBCO in 2000 inspite of serious violations listed in the WAPDA case. Also Mr. Shaukat Aziz unleashed Mr. Shakeel Durrani on Pakistan and turned a blind eye when he was blocking critical hydropower projects as CS NWFP and later as Chairman Pak Railways attacked his own predecessors on their purchase of Chinese DE locomotives. Can the nation forget that in year 2000 the Chinese people were the only friends willing to finance our infrastructure development and even rolled over the critical Forex reserves with the State Bank?

Long live Pakistan.

Industrialize or Perish (a primer)

A NOTE: Why Pakistans economy could not become self-sustaining
The Statement of Dr. Salman Shah former Adviser to the PM on Finance and Revenue as reported on 30 July 07 to the effect that private companies will build and operate mega dams has jolted many of us out of our stupor. Such a model does not exist anywhere. A developing country with an agrarian economy cannot even dream of handing over its irrigation water to the private sector. It is clear that the mistakes committed since 1980s in the sector of Utilities is reaching the pits. There is a Chinese saying when a Utility is in profit the nation is in loss. Tragically we had created a USD two billion financial black hole in our economy by the year 2004 thanks to the unsustainable private thermal generation which was uncapped and based on imported oil. The Independent Power Producers (IPPs) were inducted under the 1994 Power Policy. The devil is in the detail. WAPDA/GoP has to pay the fuel cost differential as a pass-thru component.

The hibernating HUBCO Agreement of Aug 1992 (negotiated since 1985) was made functional by unfair concessions through amendments upto 1994. HUBCO was the experiment the genesis of which were laid in 1985 on the advice of IMF. It was finally negotiated with a British Group (National Power) who brought in several partners including the Saudi Sheikh Ali Reza of Xenel. To accommodate this 1292MW conventional HFO (furnace oil) fired steam power station WAPDA had scrapped plans for the 1000MW imported coal project to be financed by Canada and froze the extension of Jamshoro thermal P.S. for which the Japanese Govt had offered to accept payment in Pak Rupees. Mr. Jam Yousaf Federal Minister of Water and Power gifted a 7 km of beach near Karachi city. A tax free island in Baluchistan. The area gifted is larger than Hong Kong. For just a 1292 MW power station! The World Bank had estimated USD 0.8 mn/MW but later allowed USD 1.2mn/MW. This was the period when Bangladesh was purchasing steam power stations with gas fired boilers at USD 350000/MW. Thank you Mr. Ibrahim Elwan. Today 15 of the 19 originally sanctioned IPPs under the 94 Private Power Policy are established. This means about 60% of the total thermal installed capacity and more than 40% of Pakistans generating capacity is in private hands (effectively foreign hands).

In contrast both China and India never appreciated this IMF/World Bank concept and did not allow more than 5% of IPP power in their national grids. Even then they later discarded a few of the projects while in Pakistan we see that IPPs have throttled the public sector. Surely the OECD Helsinki Accord of 1992 discouraging bilateral financing was not a signal for new imperialism through IPPs? There were some unsung heroes within WAPDAs hierarchy. The clean and brilliant member Power Mr. Javed Akhtar was squeezed out in May 1994 just some five months before his retirement. His successor Mr. Saeed A. Niazi also a clean person was pursued to his post operative hospital bed for signatures on the HUBCO amendments. A mere formality as WAPDA could not refuse. It is not a co-incidence that the IPPs have found an opportunity to provide over 66% of Pakistans electric power taking advantage of the low hydel generation cycle. This is unsustainable and the dire predictions made in 1994-99 period by several of us have been unfortunately accurate. Mass industrialization is now impossible. This is the age of aluminum but we cannot have an aluminum smelter since it is not viable with expensive electric power. Similarly we are excluded from several basic industrial infrastructure. The developing worlds most expensive power is now perforce being supplied to domestic users (over 60%) then to industry (around 28%) and agriculture (around 10%). The IPPs propaganda machine is so effective that even sensible people are heard expressing their gratitude for the great contribution of IPPs oblivious that imported fuel based IPPs are playing havoc with our economy. Where in the world do investors get a blank cheque for their capital cost repayments and pass-thru increase in fuel prices all indexed to U.S CPI as allowed in the 1994 Thermal IPP policy? Projects that were granted without competition for a minimum guaranteed profit over a thirty years period found ways to increase their IRRs through several routes. The capital costs of the projects (including HUBCO) being a direct liability of the GoP. Who could resist over invoicing if some one else has to pay the bill? Yes there was to be no taxation on the income of IPPs although they are Pakistani companies. The US 6.5$ tariff is a bluff as furnace oil is pegged at a rate (Rs 2350/ton) which is around 6% of todays rates. The difference payable by GoP/WAPDA. Since 2006 we see rental power also being contracted. Imported oil cannot bring prosperity. The fuel would be provided free (pass-thru) to the IPP operating the rental power station. How can anyone justify the actions of former Prime Minister Shaukat Aziz to disallow WAPDA/Genco from placing the order for 500MW Chichoki Mallian P.S. in 2007. The rates received in late 2006 were competitive. The technology and high thermal efficiency of the gas fired combined cycle P.S was inline with worldwide trends. He also shot-down the second 500MW power station allowed for Nandipur. Both thermal projects in the public sector were approved by GoP under a one time waiver in 2004/05 in view of the impending power crisis. A 1000 MW of additional public sector power would have made a difference especially in the perception of IPPs stranglehold. This was precisely what Mr. Shaukat Aziz could not allow. Today the new round of Fast Track IPPs based on thermal energy are negotiating and re-negotiating with GoP/PPIB. Some have been doing it for nearly three years taking max advantage of the shortages and load-shedding. All this while the public sector is kept blocked since 1988. HUBCO set the precedents.

When the GNP of a nation does not rise in tandem with its GDP (due to excessive outflows of profits and dividends) we have economic and social upheavals. The British Imperial masters had increased Indias GDP. After a while they had become a liability inspite of a benign rule. Secondly we all know that economic inequities lead to political and social upheavals. Historically FDI has often been misdirected and used as a tool of exploitation. In Pakistans case we are no longer having a self sustainable economy primarily due to our tragically flawed policy in the three crucial areas i.e civilian engineering industry sustenance of our irrigation assets and last but not the least our treacherous energy policy. Clearly FDI is not always healthy for the recipient. FDI should be accepted on a rational and selective basis. The Economist of 2 Feb 08 reports that finally India has now eased limits on FDI in six industries only. These include commodity exchanges credit information firms oil refining titanium mining and parts of aviation concerning only cargo planes and services including relevant pilot training.

In Dec 1998 in the office of the COAS I had presented my essay Pakistans Strategic Federal Assets. In my long meeting I had exhorted all present in his office that WAPDA must be kept intact inline with its charter of 1958. I repeated this analysis in 1999 during the second marathon meeting with him and several of his military colleagues. On his desire there was a well attended seminar at GHQ in April 1999 which was coordinated by Lt. Gen Jahangir Nasrullah (Engineer-in-Chief). My team had included some elders of the Feb 98 Water Conference including late Lt. Gen (Rtd) Dr. G.S. Butt Engr. Hisamuddin Bangash and Dr. H. Grein of Switzerland an academic associated with ETH Laussane. No one can object to WAPDAs modernization. It is modeled on the TVA which is Americas most successful civilian project. The willful destruction of its balance sheet is a national calamity. It was only six years ago when the Indian Army COAS reportedly declared and translated verbatim Every proposal in opposition to Kalabagh Dam is like a new nail in the coffin of Pakistans defence capability. In the same period a three member Indian delegation to an Islamabad conference declared that Indus Waters Treaty is superfluous!

Does the nation realize that thanks to global warming and crop failures worldwide wheat prices have increased 300% in the last five years? In a few years there will be no sellers of wheat. The three 2004 letters of late Lt. Gen (Rtd) Dr. Butt to President Musharraf are in appendix.

Industrialize or Perish (a primer)

PART I:     The facts are that:
1)    The TVA model was used to create WAPDA in 1958 : President FD Roosevelt when faced with the aftermath of the 1929 market collapse had to highlight and exploit USAs unutilized potential under the New Deal. He correctly decided that seven contiguous States had the water resources and the land. The TVA was launched and an institute was created in Mississippi where the best available talent amongst military and civil engineers was brought together. A series of 26 dams and associated irrigation channels as well as flood control structures in addition to malaria control and fertilizer production were included in the program. The project stimulated the entire US economy and the benefits that ensued were so great that the USA was ready to face Hitlers war machine. TVA remains a priceless jewel of the US economy .

The historical letter of 6 Sep 1951 written by Mr. Eugene R. Black the President of IBRD (World Bank) to PM Liaquat Ali Khan and its enclosed 10 page article; Another KOREA in the Making? by Mr. David E. Lilienthal as published in Colliers on 4 August 1951 is the starting point of the up-gradation of the IBIS. It starts the dialogue to address the core issue of water distribution between India and Pakistan. A statesmen like initiative with President Trumans blessings. Mr. Lilienthal displays great altruistic sentiments. One of his classical observations The partition gave the major part of the irrigated lands of the Punjab and Sind to Pakistan; but the headwaters of some of the largest irrigation canals that feed Pakistan were left with India or Kashmir. All the rivers upon which Pakistan depends for life originate in India or Kashmir. Two thirds of the entire water supply originates in Kashmir where the snow-fed Indus rises. Finally in 1958 President Eisenhower gifted the TVA model in the form of WAPDA.

The largest asset base of Pakistans economy i.e. the Indus Basin Irrigation System (IBIS) was now having a reservoir building organization to provide the water resources. The IBIS can remain an efficient machine as long as it has necessary water. WAPDA was a timely gift from the Eisenhower administration. On 19 Sep 1960 the Indus Waters Treaty was signed by Pakistan and India with the World Bank acting as a facilitator and guarantor. The signatories were Indian PM Mr. Jawaharlal Nehru and Pak President FM Ayub Khan. The very basics of the treatys terms were that India would be allowed the exclusive use of the waters of the three eastern rivers Ravi Beas and Sutlej while Pakistan was given till eternity the three western rivers; the Indus Jhelum and Chenab. It was expected to utilize the available marvels of the IBIS known as link-canals to keep alive the Ravi and Sutlej in its territory. New reservoirs were now needed. India was allowed run-of-the-river generation of Hydro-Electric Power on the western rivers. The use of low-level gated structures was not permitted. An exception was made for Chenab command areas and Pakistan conceded that additional irrigation water could be taken sequentially for irrigation in Indian controlled Jammu and Kashmir from 0.6mn acres in 1960 to 1.3mn acres. The water quantity being undefined. Today India is taking unfair advantage of this concession by Pakistan.

Mangla dam on the Jhelum river was quickly constructed. Preparation for constructing the worlds largest earth filled dam (Tarbela) on the Indus were accelerated. The World Bank was committed to finance one dam on the Indus and to help improve and enhance the utilization of the existing man made irrigation system inherited in 1947. School children in Europe were reading about the coming green revolution in Pakistan. The core issue was to keep WAPDA vibrant but we failed to follow through after Tarbela dam was completed in 1974. The Indian factor cannot be ignored. The Chashma Jhelum link canal was also added in early 1970s but no further reservoirs have been added. The link canals are therefore underutilized. The productivity of the largest asset base i.e IBIS depends on the support it can receive from the second largest asset base (WAPDA). A weakened water-short IBIS is now unleashing cataclysmic tendencies starting with social disorder and will lead to total anarchy. The IBIS is a very large machine and can only remain prolific with the help of needed large reservoirs to sustain Pakistans economy. In any case small dams cannot be built on large rivers.

2)    Irrigated Agriculture will remain the back bone of Pakistans economy:  It also provides the raw material for the textiles which is Pakistans main industrial sector. It accounts for atleast 90% of its agriculture production. It is based on our largest asset the efficient IBIS. An asset in excess of USD 400 Bn (at todays replacement value). This irrigation machine is water short since the early 1990s. The nation cannot maximize the agriculture output from the 42ma irrigated area. This does not include 12ma barani i.e. rainfed areas. Shortages mean that we cannot bring under cultivation the 21ma lying fallow. Not only additional acreage could be added but the additional water would permit triple and quadruple cropping patterns. Before year 2000 the water availability per capita went below 1 AF per year which is tragic as it means the nation is now water starved. The prolific IBIS machine is water short. The future is bleak.

No new dams have been built since Tarbela (1974). In fact the cumulative reservoir capacity of Pakistan has been reducing since 1974 from 16 MAF to 12 MAF. The population of Pakistan has since doubled. The IBIS includes 3 main storage reservoirs 20 barrages 12 Inter River Link Canals 43 Canal Commands over 15000 public tubewells and around 500000 private tubewells. Some 120000 watercourses and a huge surface and sub-surface drainage system. It may be appreciated that one MAF is the quantum of water if a stream was constantly flowing at a rate of 1381 cusecs for one year. Larger than one cubic km of water content. Agrarian economies should aim at a strategic one years surface flow in their reservoirs. India will soon achieve 40%. Pakistan has not even been able to maintain a ten percent (10%) reservoir capacity assuming a 140 MAF annual flow. The nation that has great strategic hydro resources in the Himalayan and Karakorum glaciers is heading surely towards famine conditions as it fails to store more water and replace the reservoir capacity already lost. Some political elements continue to ignore the basic fact that it is floodwaters during monsoon months that will be stored and utilized during the remaining ten months.

Today the Indus water Treaty (IWT) has become controversial and divisive in Pakistan. Pakistans military and political leaderships had not shown the resolve after the breakup of Pakistan in 1971 to force the truth on the Nation. Today Indians have the audacity to announce that the IWT is redundant. While the Indian factor motivates internal opposition (specifically from regional politicians) to new dams on the Indus she quotes international law on rights of the upper riparian when the lower riparian fails to fully utilize sweet water flows for a 30 years period. India ignores that the IWT is sacrosanct and till eternity. Our leadership has not understood the value of water.

Pakistan never exceeded 13% storage capacity. We assume an annual surface flow of the Indus and its associated rivers to be 145MAF. India has surface flows of around 750MAF on an annual basis. Their cumulative storage capacity by 2003 is 245MAF and growing fast. They had therefore achieved more than 32% storage capacity. The world average is 40% storage capacity of surface flows. An ideal situation would be storage capacity close to 100% so that maximum carry over capacity is available for years of drought. The table below will further clarify this point.


S. No.

River Basin

Average annual flow (MAF)

No. of Dams

Storage capacity (MAF)

% age storage








India (Total)






Indus and other rivers











Source:          Medium Term Development Framework for water sector (Group report)
                  World Register of Dams 2003-ICOLD  (Mr. Amjad Agha Nov. 2005)

3)    The 1991 Water Accord permits about 22 MAF new storages:   Half of this would be replacement of capacity lost. It assumes that 38 MAF of monsoon flood waters on average flow into the Arabian Sea every year. It was a prosperity document for all four provinces but has been willfully made controversial. Punjab made major sacrifices in agreeing to take far less than its due share from the new resources. The Accord eliminated the concept of Historical Withdrawals of Indus waters. Logically it had to cater to the new geographical realities eg: Sind was much larger before partition. By year 2010 atleast 11 MAF new surface storage was required of which half was to be replacement storage as the existing reservoirs continue to receive sand silt and sediment at the rate of 165 mn tons per year in the Indus River alone. Without new storages the Accord would have hardly any value and use. The status quo option is one of looming famine conditions also for the children of Sind.

Reservoir Sedimentation and Storage Loss in MAF


Gross Storage Capacity

Storage Loss by year 2004

Loss By year 2013


11.62 (1974)

3.26 (28%)



0.87 (1971)

0.39 (45%)



5.88 (1967)

1.29 (22%)



18.37 MAF

4.94 (27%) (gross)

6.50 MAF (gross)

Live / usable storage is approx 15% less

3.95 (25%) (live)

5.45 MAF (live)

Courtesy Mr. Amjad Agha publication Nov 2005

Sind farmers were receiving in 1991 almost double the canal water compared to Punjab. For every cropped acre Sind received 3.80 ft of canal water against 2.18 ft for Punjab. Sind canals have water allowances vastly larger than Punjab canals leading to large wastages and heavy water logging. Punjab has more than double the cropped areas compared to Sind while the canal supplies are only marginally or 20% higher. Punjab was producing 75% of Pakistan wheat 75% of its cotton and 45% of its rice while Sind produces 15% of its wheat 20% of its cotton and 45% of its rice. Punjab has a far higher productivity per unit of canal water due to a conservative use by its farmers. Naturally they have to also utilize expensive tubewell pumping of precious aquifers. New water reservoirs allocation as per 91 Accord; Sind 37% the populous Punjab province also 37% NWFP 14% and Baluchistan 12%. How can NWFP be supplied its 14% share of new reservoirs? KBDs location has max water flow and allows gravity flow to the west bank. It is indispensable for survival.

Sind with its saline and brackish underground water depends only on surface sweet water supplies and cannot have aquifer pumping as in Punjab. Sind therefore needs canal and distributory brick lining as it cannot afford seepage due to its saline aquifer. Punjab does not urgently need brick lining of its water courses. Its canal seepage is partly recovered with the precious aquifer resources but underground water quality is becoming an issue in parts of Punjab.  The high cost of lining in an inhibitor.

Sind objections are that there is not enough water in the Indus basin and WAPDA may not create further reservoirs on the Indus main stem. This is a very tragic position since ISO 14000 studies carried out by the World Bank in 1987 prove that 35MAF flow downstream of Kotri is not necessary for the mangroves and marine life. This had made the 1991 Water Accord possible between the four provinces. Sind was the biggest beneficiary as it would receive 37% share of all new reservoirs the same as populous Punjab. Incidentally KBD would only store 6MAF while Daimer Basha would store around 5MAF. This would make flows in the Indus main stem more regulated during all 12 months instead of unregulated high flow during the monsoon months and very low flows during the winter and spring months. Basically the people of Sind have been given the unfortunate impression by a small group of Sindhi nationalists that Punjab will steal their share of Indus waters. The people of Punjab who understand irrigation are of the opinion that the feudals of Sind are basically interested in flooding a swath about 14 km wide of riverine (katcha area) on both sides of the Indus river. Basically it is irrigation of 0.7 million acres by moisture (sub-irrigation through salaba or flooding). This is a great waste of resources and not in the long-term interest of the gentle people of Sind. The wadera feudals have to be convinced first or ignored!

NWFP objections are based on the 1929 flooding of Nowshera valley. This historical flood occurred when the Swat Kabul and Indus rivers were in extreme high flow due to non-stop rainfall in their catchment areas. There were no means of telecommunication and no telemetry/automatic stations to give an advance warning to the authorities to expect a flood at Nowshera due to the back pressure from the constricted Attock gorge. British bombers were flown from England and they had to fly reconnaissance missions before they discovered that nonstop rain and total absence of telecommunications has caused this situation. Today there are multiple arrangements for over 2 weeks advance warning of a coming flood. The availability of a dam permits immediate draw-down of the reservoir to take the flood shock. Dams are flood control devices and do not induce floods. Only KBD allows gravity flow to the right bank and would permit the 14% share to NWFP under the 1991 Water Accord. The natural drainages of Peshawar Kohat and Nowshera valleys will not be affected by KBD. Water finds its own level. Even with the original KBD design a repeat of 1929 floods is not possible. Similarly the maximum level of KBD reservoir during the flood season will be 915ft above sea level. The lowest point in the Peshawar Kohat and Nowshera valleys is Pabbi 962ft. There is no known scientific reason (including capillary action) for water logging to happen. Neither can natural drainages of the NWFP valleys be affected due to KBD.

Bhasha Dam was unfortunately made the focus of attention by former Chairman WAPDA in July 2001 during the launch of WAPDA Vision 2025. This was an error of judgment as our conference of 09 Feb 98 based on rational data had concluded that Bhasha is above all a debris-check dam for enhancement of Tarbela Dams useful life. Conceived as a roller compacted concrete gravity dam about 232m above riverbed and about 281m above bedrock it dwarfs even the Grand Coulee. No doubt it will add around 5MAF reservoir capacity and cheap hydropower during its short life span but its construction is a monumental task which could involve upto 15 years. Several major constraints in building Bhasha are well known. The KKH from Thakot upto site (over 200 km) has to be strengthened/widened. This is an arduous task. There are absolutely no construction materials at dam site (only granite). The upstream KKH around 100 km has to be rebuilt at a higher alignment (about 900 ft higher). There are strong lifting pressures due to soil conditions of the riverbed. After all we are attempting to construct the highest ever (nearly 270m) Roller Compacted Concrete (RCC) dam in the world. Higher than Hoover Dam! No rock or earth filled base. The dams downstream terrain has a climb elevation of 1:7 which is excessive for operation of heavy construction machines. Finally it is an active seismic zone of the Karakorums where the Indian and Central Asian plates meet. The ongoing design is theoretically beyond todays knowledge of dam building technology. Let us keep in mind the Pattan earthquake of the 70s and the October 2005 earthquake. If this dam breaks it will leave nothing in its path upto Sukkur. Late Lt. Gen. Dr. G. S. Butts three letters of 2004 to the President of Pakistan bear testimony to the great challenge of building Diamer Bhasha.

4)   Appointment in 2004 of Mr. A.N.G. Abbasi as head of the so called technical committee reportedly on the advice of Senator Mr. Nisar Memon: 

A tragedy. He is known for his rabid anti-dam views and we remember the unfortunate situation he had created earlier as Sind provincial minister. Both ANG Abbasi and Mr. Nisar Memon had written a controversial Water Committee paper in 2000. In 2005 he delayed his report compelling the other 7 members to submit their report independently of him in May 2005 while he took several months longer. He however ensured that Bhasha take precedence over Kala Bagh Dam (KBD) and recommended it to be a carryover dam without canals. Bhasha can have no canals for NWFP and Punjab. KBD is a never silting dam with 6.1 MAF live storage. Although smaller than Tarbela its location is near perfect. Maximum flow of the Indus river occurs at KBD site as glacier waters and monsoon waters converge. KBD has to be operated in conjunction with its bigger brother Tarbela and smaller brother Bhasha for best results. Dams in cascade allow release-hold sequence whereby the same water quantity is used repeatedly for power generation and the required irrigation releases are from optimum locations. Are we going to remain at around 20 million tons wheat production forever? In March 98 Mr. Gupta of the World Bank visited me in the company of Dr. G.S. Butt and Mr. Khalid Mohtadullah (then member Water WAPDA) and related the saga of KBDs very extensive studies. It was reassuring to learn that ISO-14000 studies were also done in 1987 which removed doubts about any negative environmental impact. The propaganda about sea-water intrusion destruction of mangrove forests in the Indus delta as well as impact on fisheries have all been thoroughly investigated. KBD is indispensable for Pakistans economy. The 4 April 97 letter of World Bank President Mr. James Wolfensohn recommends KBD as part of the least cost solution and a project which could add significantly to Pakistans irrigation potential. The brethren of the NWFP have to finally appreciate that the extra-ordinary 1929 flooding of Nowshera was caused by an absence of a dam such as KBD. Instruments and communication systems would have allowed a draw down before danger levels were breached. Dams help to control floods and do not induce them. The nation has not appreciated the role of water reservoirs in the national economy. Some are playing politics and blocking projects for sweet water storage under the tragic slogan of provincialism. WAPDA which used to give rupee loans to the GoP in the 1970s was burdened with excessive electrification by successive governments but was denied after 1974 the indispensable multipurpose reservoirs. The Hydel policy 95 (a ministerial decision) and the National Drainage Policy 1997 have been bad precedents. Severe imbalance of irrigation and drainage has particularly created more water logging and destruction of irrigated agriculture. The ominous Indian factor is clearly visible since 1947. Remember Ferozepur Headworks! Do we comprehend? The Indians understand it very well.

It becomes important for us to calculate the financial impact of 1 MAF of additional reservoir capacity in the IBIS : I am convinced it is now around USD two billion per annum on the nations GDP. KBD construction should have commenced in 1983/84 and completed in 1989/90. Therefore in the seventeen years that KBD could have been available the loss to the national economy due to the 7MAF KBD alone has been over USD 200 Bn. Infact the non-implementation of the 91 Accord means that after year 2000 we lose cumulatively  around USD 44 Bn per year. It is simple to check this thesis. Remove Tarbela (9 MAF reservoir and power generation) from the scene and Pakistans economy will shrink by 15% to 20% at todays GDP level besides other implications. Remember the 1991 Accord allowed 22 MAF additional storages half of which are to replace the lost capacity of existing reservoirs.

6)    The entire developing world is building dams. Indian activity is suspect: China has completed several thousands in recent years (total now around 22000) including the Three Gorges Dam. The USA built 5500 dams and does not need more. It can afford to decommission some. India has undertaken 650 dam projects (over 4000 exist) including the controversial NIRMADA after the Indian Supreme Court decreed it. India has launched in 2006 the USD 200 Bn Northern Reservoirs Linking project whereby in ten years all reservoirs from East Punjab to Bengal would be interlinked. It is the world largest ongoing irrigation project. This astounding project based on the Prabhu Task Force Report is also known as the river linking project. A network of link canals to connect all the rivers of India; Mahanadi to Godavari Krishna to Godavari Brahmaputra to Ganga Narmada to Tapi Cauvery to Vaigai. The task force included Mr. C D Thatte who is also the Secy Gen of the International Commission on Irrigation and Drainage (ICID). The ICID is an Indian think tank (NGO) established around 1950 by PM Jawaharlal Nehru. Today ICID advises the World Bank and other multi-laterals on irrigation projects; appraisals and feasibilities of projects the world over!

It is our considered view that the dozens of barrages and dams under final stages of construction in Indian occupied Jammu and Kashmir (some surreptitiously) with their low level gates (classified as silt excluders) are for the ominous purpose of water theft. The developed world does not need more reservoirs. They can talk of decommissioning of dams as their population shrinks. Please appreciate one of the most effective think-tanks on water policy for the multi-laterals is the ICID (International Commission for Irrigation and Drainage) which has its HQ in New Delhi. No doubt Indias Jawaharlal Nehru was a wise leader for his nation. Now the Indian influence on our regional politicians has gone too far. The responsibility for interference in our irrigation system development since 1947 would have to be shared by the Indian leadership just as their open involvement in East Pakistans separation. This time the charge is water theft leading to a genocide of the Pakistani nation.

So-called lack of consensus on large reservoirs resulted in some quick fix private thermal stations after 1994. Why is this nation addicted to imported oil?: The now discredited CALIFORNIA model of private generation being discussed by IMF and World Bank since 1988 was applied to block the public sector effectively from setting up new thermal and hydel projects. HUBCO preceded it. The 1994 Power Policy invited the IPPs and the public sector was instructed to abandon its own plans for new thermal power stations. Only two thermal stations in the public sector were permitted to complete their expansion. Strangely the bureaucracy continued to ignore Pakistans 40000 MW hydro energy potential. If the multi-purpose reservoir projects had been blocked by a few provincial politicians the-run-of-the-river hydroelectric projects especially the high head tunnel projects in the north should have been accelerated. WAPDAs balance sheet as a direct result of expensive power from IPPs started to become very weak. WAPDA was now buying thermal power in some cases at 300% of its own thermal generation costs. Every few months some new or old ill-conceived proposal is thrown up to confuse and derail internal debate. One of the most preposterous hydro schemes is so called 35MAF Dam in Katzara also known as Skardu Dam. Friends with knowledge of the Northern areas believe that this mega Dam can only be imagined at a site near Kachura some 18 km downstream of Skardu. Mr. A N G Abbasi Chairman Technical Committee on Dams has also given preference to this Dam site. Further proof that Mr. Abbasi does not wish Pakistan well. Firstly he expects to store the entire annual flow at this nascent point. Naturally there can be no canals in the Karakorums. Secondly this Dam site is anti civilization as it would inundate / submerge the entire level soft soil area of Skardu and Shigar making the area uninhabitable. The peoples of Skardu and Shigar valley would have to be relocated. Even Skardu Airport would be under 1000 ft of water. In short the entire Balti civilization would be uprooted and their lands submerged. No one would finance such a project. Only a mad man would permit such a project.

WAPDA as predicted is now unable to undertake major projects on its own balance sheet. A major handicap for the sustenance of the IBIS. The hydro based TVA model has been mutilated. Pakistan has become a water short country. Fresh rounds of thermal IPPs are now being permitted creating a mortally dangerous situation. The tariffs are unsustainable for the economy. Competition with public sector is not even discussed; such is our anxiety for FDI. The final blow would come with privatization of dams.

   Food Autarky:   The IGC (International Grain Council) gave its first caution in August 1997 when Chinas wheat production fell from 127mn tons to 104mn tons the year earlier. Fortunately the wheat production of the year 1997 / 98 did not fall from the total 586mn tons level of the previous year. That year only 94mn tons were available for world trade in wheat but the total stocks held were an adequate 103mn tons. Thanks to global warming crop failures drought and changes in crop patterns in Australia Canada and USA and partly due to the use of crops for producing ethanol and biodiesel we see a severe crisis developing. The IGC estimate for 2005 shows that the peak in wheat production has been crossed and it was now downhill. Please note that the world wheat production in 2005/06 was 620mn tons but it declined to 590mn tons in 2006/07. The consumption is estimated at 610mn tons. A shortfall of 20mn tons which is a serious depletion of world stocks! Prices for this reason have risen three times in last 5 years. Prices doubled to USD 400 per ton in Jan 2008 from USD 208 in January 2007. The price situation with Coarse Grains such as maize millet and sorghum is not critical as our farmers have improved their yields.

    The HUBCO IPP project was finally commenced in 1994 together with more than one dozen other IPPs based on imported thermal energy: The major fuel to be imported was furnace oil. Truly an expensive and dirty solution. A 1292 MW conventional steam turbine power house based on dirty RFO/HFO (furnace oil) is not to pay any taxes for the 30 years duration of its agreement. Its debt is repayable by the GoP. Through the 1993 and 1994 amendments of its original August 1992 agreement managed an increase of its reference tariff from 1.36/KWh to Rs. 2.42 /KWh (November 1993) and Rs. 2.81/KWh (November 1994). The reference tariff adjusted on January 1998 reached Rs. 4.34/KWh. The manner in which the amendments to the agreement were managed in Nov 93 within 15 months of the signing of the main agreement is brazen and cruel to the host country. HUBCO took nearly 760% advantage in its equity pay back to help Hubco sponsors to recover their project equity in minimum time making this agreement perhaps the most one-sided major commercial contract in the second half of the 20th century. Just within 13 months of coming into commercial production an amount equivalent to USD 380 mn had been paid back by WAPDA through tariff which is more than the total project equity of USD 373 mn  (some sources say this figure is below USD 340m). The project has turned out to be one of the most expensive in the world charging the capacity purchase price amount double of other IPPs. Its imported oil kWh unit costs reached US 11 cents by late 1997. In its 2nd ten year period its kWh is costing around US 20 cents thanks to the 2007 oil shock.

Tariff means the sum of Energy Price (EP) and Capacity Price (CP). The EP includes the direct fuel cost and the variable OandM cost. The CP includes the escalable component (fixed OandM cost insurance cost admin cost and return on equity/profit etc). The CP also includes the non escalable component which is simply the debt servicing. It is also an over-invoiced project. The similar Chinese supplied Muzaffargarh steam station was installed in less that USD 0.5 mn per MW and Hubco should not have exceeded USD 0.8 mn per MW. Instead HUBCO declared USD 1.2 mn per MW which even latest higher efficiency Combined Cycle projects do not cost. WAPDA never received the Reference Financial Model (RFM); on which the Reference Tariff of the 1992 agreement was calculated; and the various assumptions used in that model. WAPDAs financial auditors team could not analyze the basis of various assumptions as well as financial calculations to arrive at a justified Base Reference Tariff of 1992. Hubco never provided full details of Project Equity Cost; supported by actual invoices of Plant and Machinery Cost of Construction Cost of Land etc. HUBCO never produced the ORIGINAL Agreement deed regarding Amendment # 2 of September 1994. By April 97 major financial and operational irregularities were detected. No wonder several beneficiaries live in luxury abroad.

We note that the financial close did not take place by the promised date of Feb 1993 but in fact occurs in Jan 1995 a delay of nearly 24 months. During this period HUBCO found the political climate conducive to extract further benefits outside the parameters of the 1992 Agreement.  The controversial Amendment # 2 was granted. They were able to change the debt equity ratio to improve the costs which were payable to NP under a disproportionate formula as well as a new financial closing date for calculating the reference tariff. It is no surprise that in response to later inquiries the attachments of Amendment # 2 (concerning the dubious assumptions) only few pages could be collected from the trustee when a request was made for an authenticated copy. HUBCO was guaranteed generation outage compensation beyond reason. They were allowed the scheduled outage of 1 month per generating unit per year. In addition for every gen. unit another 800 hours of forced outage allowance (i.e. 33 days /machine). Beyond these outages if there is a shut-down HUBCO may still receive 75% of the Capacity Price (CP) upto about 2 months. No wonder one of their gen. units is normally not working. This is more concession than for other IPPs and far more than what Bangladesh allowed. In this period (late 1994) HUBCO made tremendous financial gains which took the project IRR much higher than 18%. The project costs of around US$ 1.5 Bn (payable by WAPDA/GoP) is far more than the cost of equivalent 1292 MW steam/conventional projects worldwide. The reference tariff has lacunae clearly to the benefit of HUBCO/NP including exchange rate differentials at every stage of the repayment. Strangely the relationship of HUBCO/NP and WAPDA/GoP is of a fiduciary nature wherein HUBCO is responsible to render full accounts for the payment charged to and collected from WAPDA.  The 1994 Energy Task force under Mr. Razzak Dawood failed to give an upper limit for IPP participation.

  HUBCO is Pakistans largest private company. Did anybody ever think of the consequences under this agreement if the Pak Rupee was to collapse against the USD. Pakistan has intractable long term financial contracts with all IPPs under the 1994 Pakistan Power Policy. With these private thermal projects the hydel:thermal ratio of 70:30 which was considered viable for the economy was disturbed. It has become lopsided (30:70) and worsening. Hydropower inherently suffers periodic lows due to excessive variation in river surface flows. Ideally 100% hydel power would be perfect but some thermal energy in the mix is unavoidable due to the surface flow variations. Through an avalanche of pro-IPP propaganda every detractor was sidelined. Try to discuss the IPP menace and you will receive cynical silence.

Excess power capacity is also dangerous for a nations weak economy: However excess private power (IPP) capacity is suicidal for the economy and the Federation. The Private Power Policy 94 was an unrealistic and defective policy and furthermore its implementation was callous and brutal. National utilities have been financially crippled with cold-blooded precision. Mr. Shahid Hassan Khan and his friends had committed serious economic blunders in the planning and implementation of this policy. Without realizing the implications for the national economy they encouraged a stampede of investors with an incompetent one-sided private power policy and ended up by issuing letters of support (LOS) for 27 Thermal Power Stations primarily on imported energy. No upper ceiling was considered inspite of several cautions. Today we see the crippling financial consequences due to a tariff related to imported energy. The twin menace of official corruption and low efficiency cannot be blamed for the sudden collapse of both national power Utilities. The privatization of basic Utilities is not sustainable. Tariffs can never be effectively reduced and the repatriation of dividends and profits has not allowed the growth of GNP in tandem with GDP. The hundreds of closed industrial projects will increase in population. In 2007 there was a USD 4.4 Bn black hole in power utility finances impacting on the national Economy.

Sadly in the last two years we see shortage of electric power develop in the country. Electricity deficit during March 08 was approx 2500MW in a total Generation capacity of 20000MW (WAPDA KESC IPPs Captive power and PAEC). Regretfully the mix has been made lopsided. Instead of the hydel: Thermal ratio of 70:30 outlined by the national planners it is thanks to our addiction for oil now around 33:67. The thermal includes Nuclear energy generated by PAEC. Regretfully generation based on coal is negligible. Our 184 Bn tons of brown coal (lignite) reserves at Thar being still discussed 40 years after the first serious report established its huge potential.

High tariffs in turn impede industrialization. A double whammy. Can we deny that Pakistans credit rating by Moodys or Standards and Poors had fallen to the lowest level between July 1996 and Sep 2001. It was at the level of Chad and Niger Republics. The atomic tests of May 98 were only a factor. The main cause was the suicidal water and energy decisions between 1983 and 1994. Construction of Kalabagh Dam should have commenced in 1983-84. Education and infrastructure were already neglected areas since 1971. In May 2000 the Pakistan finance delegation to Beijing under Finance Minister Shaukat Aziz participated in the fifteenth Inter-ministerial Conference and basically received the roll-over of the USD 500 mn of PRC funds which constituted the bulk of the Pak foreign currency reserves! Bankruptcy loomed before 11 Sep 01 and the start of the war on terror. Dollars flowed in as aid loans were rescheduled or converted to grants etc. Private capital also returned home. The relief is not permanent. In 2007 Pakistans energy import bill for 17.5 mn tons of petroleum products including HFO/RFO crossed USD 11 Bn and the budget deficit will cross USD 14 Bn!

Comments of international experts as recorded on 8/9 Dec 97 at the Workshop on New round of IPPs arranged by the Ministry of Water and Power Islamabad: The second sessions main speaker Dr. Tom Jardine a hydel consultant commented that  Pakistan has substantial hydel resources. He also believed that worldwide fossil fuel burning would soon be penalized. This would be an important inhibitor for thermal IPPOs. He believed that clean renewable indigenous energy (hydel) is the long term solution for Pakistan. He agreed that BOT hydel model is not easily covered under ICB and therefore pre-qualification would be very critical. He agreed that there has been in the UK a 9% fall in tariff over preceding eight years. In the same session Madame Janet Tay (President JT Consultants Singapore) an ADB consultant made a statement that worldwide and especially USA experience shows that average hydel tariffs are US 2.5 cents versus US 4.5 cents for thermal. Although hydel is 50% higher in investment it is still cheaper due to low OandM. In UK there is a fossil fuel tax. Her comments were in response to the astounding opening remarks of Secretary Ministry of Water and Power Mr. Javed Burki that thermal P.S. are part of the least cost solution. Mr. Tom West consultant PPIB spoke impressively. His speech covered three points:

The share of a entrepreneur a single company a group of companies should be restricted to 10% of a power system otherwise it exerts monopolistic control. He believed this step was necessary to ensure that a state monopoly may not be converted into a private cartel or an oligopoly.

    Tariff should be back end loaded instead of front end loaded as per the 94 power policy. This was a very valid point and much appreciated.

    He stated that the tariffs below US 3 cents quoted in Egypt and Bangladesh for gas-fired power station had a major relevance for Pakistan.
Note: There Figures from 1997 compare favourably with statistics of 2005 collected by a MIT (USA) research group. They report that generation with gas fired P.S (on 40yrs basis) @ US 4.1$; coal-fired @4.2$; Nuclear Thermal P.S @6.7$ but is dramatically reducing as construction costs become cheaper. Worldwatch UK reported that large hydels @3 to4$; wind power @ 4 to 6$; offshore wind farms @ 6 to 10$; solar pv @20 to 40$. In UK the energy mix is coal 35% gas 35% nuclear 21% oil 3.5% renewables 3.5% hydro 1.75% biodiesel 0.25%. Incidentally by 2005 the USA had achieved 3% share of Biofuels Germany had achieved 5% and Brazil 25%. The UK target being 5% by 2010.

13)    Historical Legacies :  Today we observe that expensive energy discourages mass industrialization or any credible investment in basic sectors. Together with poor technological training of our manpower we have created a dangerous combination. Let us analyze our technological / industrial legacy. The truth is that the Europeans introduced Indians to the first modern industrial revolution. Muslim Mughal India inspite of its martial traditions had neglected the great traditions of early Muslim Scholars in mathematics general sciences and medicine.  The occasional recourse to Persian architectural and building techniques did not herald a technological revolution.  Europe had already started coming out of the dark ages and had commenced using steel foundries together with molds and metal dies. The Muslims of North West India were barely crawling out of the bronze age when a modern day imperial power overwhelmed them and took control within a short period of history. One is acutely aware that Turk Egyptian and Mesopotamian universities in the Islamic world were functioning in isolation but Indian technical institutes were altogether non-existent. The first modern university in the Indian Sub-continent was established in 1857 at Calcutta and developed technical schools. Later the Aligarh Anglo Oriental Muslim College was established in 1875 exclusively for young Muslim men. It went on to become the Aligarh Muslim University in 1920. The Zakir Hussain Institute of Engineering and Technology was established under this University in 1938. Earlier in 1921 was founded the Dacca University of East Bengal and soon had a technical institute. Access for Bengali Muslim men was easier. It is a historical fact that the worlds first university was established in Takshila in 700 B.C. More than 10500 students from all over the world studied more than sixty subjects. The University of Nalanda built in the fourth century was one of the greatest achievements of ancient India in the field of education. This was the pre-Islamic era. Let us not forget that India was one of the richest countries in the world till the arrival of the British in the early seventeenth century. In fact Christopher Columbus was attracted to Indias wealth and was looking for a route to lead him to it when America was discovered by accident. Tradition and family skills were the vocational training pools of Mughal India. Having just lost their American colonies; later to be called the USA the British forces came into Muslim India like an unstoppable tornado.They found besides a milieu of cultures religious and ethnic groups two distinct communities who had seen their days of glory and were now in a state of retrogression and decay i.e: Hindus and Muslims.Their contemporary state of industrial technology had regretfully a negligible connection with the Pre-British colonial rule. The steel age arrived late in India. 

The early East India incursions in a Westerly direction beyond Madras and Calcutta were easy pickings for an organized and disciplined force. The period of consolidation followed.  Thereafter a quelling of the so-called mutiny of the natives in 1857 was swift and in hindsight most reassuring for the imperial forces. It was now time to re-educate the natives and create the new eastern base for Her Majestys Pax Britannica. The Indian Muslims were a talented and intelligent people but they lacked modern-day skills.  The first University of British India (admitting Muslim students) at Aligarh was established in 1875.  The road network started around 1540- 1545 by Afghan King Sher Shah Suri was enlarged.  The plains of the Punjab required scientific irrigation methods so the waters of the Indus Basin could be put to better use.  Aquaducts using gravity were known to the ancient Indian. Pumping and basic hydraulics were improved after the arrival of the Fresh addressers and expeditionary forces. Not only were the hardy natives of the Punjab found suitable for agriculture but their skills in metal work and carpentry convinced their new Imperial Masters that the industrial engineering and forge/foundry techniques of Liverpool Northampton and Newcastle could be supplanted here.  Soon enough the bulk of the textile manufacturing processes of Manchester and Bradford were duplicated in the Lahore and Amritsar belts of West Punjab (now Pakistan) and Indian East Punjab.

The Hindu community was less resentful of the British conquest of Muslim India and assimilated quicker within this new culture of Europeanization.  As a result their per-capita share of the steel mills machine tools and foundries was greater.  In general British India including the highly rated Industrial belt of what is now Pakistani Punjab became the springboard for the Pax Britannica Eastward Export Drive.  Machine tools diesel engines and irrigation pumps were by 1900 competing with newly emerging industrial Japan in the markets of South Asia and South East Asia. These markets included Burma Ceylon former Malaya and Indo-China. Feudalism in British India remained a deterrence for industrial development. It limited the levels of education except in the very closed urban areas. 

The Second Industrial Revolution and Beyond (Pakistan Specific)

The second industrial revolution (in Muslim India) arrived some 50 years before the creation of Pakistan in 1947. The steam drives of marine vessels and railway locomotives were being serviced at Karachi and Lahore.  The magnificent North Western Railway network (NWR) starting from Karachi to Peshawar via Multan Lahore and Rawalpindi had side tracks to Quetta Kundian (Mianwali) and Lyallpur (now Faisalabad). The British rulers developed all means of transport basically to secure their volatile Western borders with Afghanistan and Czarist Russia. It brought with it the convenience of the first and even second industrial revolutions since medium speed diesel engines were also deployed.  The Internal Combustion engines of automobiles buses and trucks were now in extensive use.  Also an airline industry was launched after the second World War essentially managed by aviators from the military.  Regretfully the Government did not think it necessary to introduce the manufacture of medium speed and high speed Diesel engines or petrol engines- the kind that power automobiles and road vehicles. Abdullahpur (Lyallpur) was home to an important 10MW Deutz Diesel power house while Karachi Multan and Rawalpindi had Diesel and Steam Turbine driven power stations. Half a dozen hydropower plants were created as an off shoot to the great irrigation system created in the Indus Basin. However no efforts were made to induct/upgrade manufacturing skills in these sensitive spheres of energy converting machines inline with the neglect of internal combustion engines electric generators manufacturing and dedicated metallurgical/ alloy labs.  Whereas the first Engineering College in what is now Pakistan was established around 1925 at Lahore (Mclagan College) there was no major attempt to upgrade manufacturing skills after World War I.  The service sector was developed. The Tatas and Birlas expertise in steel making was inherited exclusively by India at partition of the subcontinent in 1947. Private initiative in the Pakistani Punjab was based on levels of skill in metallurgy existing at the turn of the century based on skills of the first industrial revolution. This obsolete capability was doomed to die out in the export markets and within 25 years after partition even the locals were wary of these primitive and archaic machines. After the creation of Pakistan the Military and Aviation Industries during the 1960s and early 70s managed to master the maintenance aspects quite proficiently.  However negligible import substitution was attempted through in-house workshops basically due to the lack of volumes and attitude of the bureaucracy. This attitude of the civilian bureaucracy has been endemic. The shackles of the feudal mind-set remains a major hurdle towards industrialization. Pakistan remains a society dominated by the feudal culture although the urban centers are now superficially liberal and modern.

The Textile spinning and weaving institutes also made a brave effort in the 1950s and 60s to learn the craft and maintain the imported machines. A power distribution Industry was created with indigenous manufacturing of power and lighting cable meters fans lamps and accessories. Separately medium voltage distribution transformers and basic switchgear was assembled / manufactured. However indigenous design capability was very limited. Tragically the era of the transistor which ushered in the electronic age the age of analog computers and of course the arrival of digital computers in the late 60s was completely missed out on. The end of the second global industrial revolution in the 1960s and early 70s saw worldwide great advances in electronics material sciences and metallurgical processes. Pakistan totally missed out on this aspect of the second industrial revolution and was therefore ill equipped for the third global industrial revolution. The revolution that brought automation of industrial processes and manufacturing in the world to a level of great efficiency speed and accuracy. Technology incubators would be needed to catch-up. We dont realize it.

Global warming. Great Floods are predicted. Grain Output worldwide is falling: Let us understand that worldwide over 6 Bn tons of CO2 is emitted every year into the atmosphere. The greenhouse effect caused by an invisible blanket has resulted in an average 0.7oC rise. Glacier melt has increased exponentially around the world since 50 years. The Polar caps began to shrink dramatically as well. Our sweet water supply is 70% fed by the mighty glaciers. Without several new reservoirs we are not prepared for extra-ordinary flooding and non-seasonal flows expected over the next 25/30 years. Sweet water once lost by the glaciers is not recoverable. As a result of this modern menace nearly 50% of glacier retreat has already occurred (around 33% loss of surface area). Switzerland tried to cover the alpine glaciers with plastic fabric unsuccessfully.

Indias genocidal war through water theft:   The foregoing analysis confirms that we are since 1947 being subjected to a life and death struggle by India the upper riparian. Indias war has been surreptitious. The role of the Americans at the incipient sages of the nascent dispute has been humane and statesmen-like. The brilliant article of Mr. David E. Lilienthal as reported on 4 Aug 1951 having the title ANOTHER KOREA IN THE MAKING was attached to the letter sent by IBRD (World Bank) president Mr. Eugene R. Black on 6 Sep 1951 to the Prime Minister Mr. Liaqat Ali Khan. The IBRD initiative was benign and timely. The subsequent events leading upto the signing of the 19 Sep 1960 Indus Waters Treaty at Karachi between P.M Mr. Jawaharlal Nehru and President Ayub Khan are well recorded in Mr. Bashir A. Maliks book Indus Waters Treaty in Retrospect. The IBRD acted as Facilitator and Guarantor for the Treaty. However the Indian mindset and machinations were beyond the comprehension of people acting as honest and concerned brokers in this deadly water game. The Indian effort has been so comprehensive and total that it can only be described as war for water which is leading to a genocidal phase for the loser. Regretfully Pakistan is at the receiving end. An army of fifth columnists now stalk the nation opposing every effort to build the life-sustaining reservoirs on the Indus river. Who is motivating and financing this vicious and dangerous enterprise against the people of Pakistan?  Do we care to know?

The mix of incompetence institutional greed and nations lost opportunities: Scientific thought and discipline are not in style here. The Poverty cycle could not be broken here especially due to the fact that the political leadership was generally looking for short-term gains. The bureaucrats are part of the problem. For every efficient and patriotic bureaucrat there is some one who is working on a personal agenda. We could deliberate on why it took 30 years to have a steel mill. Why this steel mill is based on imported iron ore when the Germans had demonstrated that Kala Bagh ore together with a mix of Pakistans coke could have been made functional. The family dominating steel trade responsible for this national tragedy is known to most of us who have studied Pakistans development history. The failure to build multi-purpose dam projects on the Indus main stem after 1974 (Tarbela) is perhaps the biggest economic catastrophe in our history. Let us look at some recent examples where impulsive and arbitrary decisions resulted in major setbacks to the nation. The rogues are still active.

In Dec 2001 during the second visit of President Musharraf to PRC several MOUs were signed for run of the river power projects with various PRC engineering and construction companies on a turnkey (EPC) basis. WAPDA had invited reknowned PRC corps to assist Pakistan to take a leap forward within the objectives of the VISION 2025 program launched in July 2001. The invitations were sent in Nov 2001 inviting PRC groups to agree to sign hydropower MOUs in the presence of the President of Pakistan who was to make a state visit in third week of Dec 01. Within the MOU draft each PRC supplier/contractor received a reference price for the EPC (turnkey) project for which suppliers credit would be arranged by the individual supplier/contractor. Therefore WAPDA solicited and invited partners. The author of this hydel campaign known as WAPDA VISION 2025 and launched in July 2001 was Lt. General (Retd) Rao Zulfiqar Khan a clean hardworking Chairman of WAPDA since late 1998. His quirk being that he was somewhat distrustful of contractors of all shades. The PRC groups showed exemplary cooperation. Only one MOU for the 96MW low head Jinnah Hydel on the Jinnah Barrage became a contract with M/s. Dongfang in Nov 2003. It is under construction. The final cost allowed USD128 m+. The PRC Exim credit at reduced 5% interest p.a. The P.S. has a high plant factor as it utilizes part of the main Indus flow. Clearly Dongfang was favoured by both sides.

Three other Hydropower MOUs were signed in presence of the President. With M/s. Sinohydro Group for Golen Gol 106MW (Upper Chitral) CMEC Group for several low head canal based P.S. in Punjab (totaling around 80MW) and with CGGC/Gezhouba Group for Keyal Khwar 130MW (Kohistan). A small but significant initiative to start exploiting the 40000 MW hydropower potential which our nation had identified. Indeed future generations will be unable to understand why we could not find a quicker way to use this hydel potential known to us since 1960s. ?

Second MOU was for Golen Gol. Sinohydro the largest hydropower construction group of PRC approached WAPDAs management in mid 2002 after realizing that their MOU includes around 125 km of 132 kV transmission line (over a very harsh terrain) for which they would require another USD27 m above the MOU price of around USD90m EPC. It is clarified that EPC is the technical description of a turnkey contract where prices are fixed during the period of the contract and therefore escalation is not provided for. Yes 85% foreign currency financing was to be brought from PRC Exim Bank on a standard commercial 12/15 years format. Sinohydro was refused the legitimate extra money requested for the 132kV transmission line and WAPDA cancelled the MOU. A national tragedy to be soon repeated on the Gomal Zam Dam project in bloody Waziristan. WAPDA lost friends in the most critical development sector and therefore it was a national tragedy.  Vision – 2025 did not start well.

The third was CMECs MOU. This corp realized that the MOU value was grossly under priced. Again WAPDAs bureaucrats saw this as a trick for price enhancement and rejected their request. The fourth and last group was also under price pressure. CGGC / Gezhouba group were motivated to stay in the arena as WAPDA kept telling them that the mega tunneling project Neelum-Jhelum 969MW would be their reward if they would agree to work on the tentative price level of their respective MOU. CGGC being effectively the second largest hydropower construction group of PRC was incidentally the lead contractor of the Three Gorges Dam the worlds largest hydro project (completed in 2005). They agreed to work within the MOU tentative price and even agreed to complete the unfinished feasibility. This engineering task they were able to complete with their own resources in 10 months around Oct 02. Their trial began.

The genesis of problems for Keyal Khwar Hydropower Project (HPP) the 4th hydel MOU began with the NWFP SHYDO organization resolution. In violation of the 1995 Hydel policy the Power Generation policy 2002 as well as the 1973 Constitution of Pakistan they refused to recognize the 130MW Keyal Khwar HPP as WAPDA / GoP domain. A sovereign MOU having been signed on 24 Dec 01 with a PRC Group in the presence of the President of Pakistan. The NWFP SHYDO Board under Chairmanship of CS NWFP Mr. Shakeel Durrani suddenly decided in Jan 03 to construct from its own resources the Keyal Khwar HPP. The MMA government of NWFP supported the CS inspite of the fact that Chairman WAPDA had an agreement with Governor NWFP on 28 May 02. Minutes recorded under SO (Dev)/6-S/20025667-81 dated 05 June 02. NWFP did not withdraw its letter of Jan 03 to the Planning Commission Islamabad. On 27 Sep 03 the ACS NWFP asked for adjournment of this agenda point at the first ECNEC meeting during discussion of Keyal Khwars PC-I application. This was a blatant violation of the Constitution of Pakistan which permits power generation by provinces if they can self utilize the power. Keyal Khwar HPP is a remotely located peaking plant and therefore can only be integrated with a large Utility network. Self utilization requires Base Load Plants with a high plant utilization factor as near as possible to the load centers to avoid high transmission costs. Also under the Power Policy of 2002 the Provinces/AJK have jurisdiction on projects upto or below 50MW. Therefore even if WAPDA had not signed a sovereign MOU with a PRC group in Dec 01 the provincial authorities of NWFP could not demand to execute this remote 130MW project. The CS NWFP was determined to have a confrontation when he initiated the SHYDO decision. The dispute started by CS NWFP Mr. Shakeel Durrani in Jan 2003 subsequently disturbed the project schedule by over eight months and later led to the illogical ECNEC decision (in Jan 04) ostensibly due to interest rates.

On 07 Jan 04 for the second time Keyal Khwar 130MW high head MOU project reached ECNEC and was rejected inspite of the contractor CGGC having agreed with WAPDAs demand for the original MOU cost of USD 100m (EPC / fixed price). He had completed additionally the engineering feasibility from his on resources. CGGC had not been able to arrange for the Exim Loan interest rate to be reduced below 5.5%. Keyal Khwar HPP was a US 2.17 $ per Kwh power generating project. Such a low generating costs inspite of short time peaking capability. No one in ECNEC including WAPDA engineers had the acumen to speak-up. How could the NPV be poor if a US 2.17 $ project has a slightly higher interest rate loan? This project with a 700m + head was to be basically a peaking project i.e. operating about 6 hrs in 24 hrs. The generators being driven by two pelton turbines each receiving 11 cumecs of water flow from the small storage yet produce nearly half billion units of power per year. It was to be close to the three similar projects being constructed by WAPDA nearby (Duber Khwar 130MW Khan Khwar 72MW and Allai Khwar 120MW). Khwar is a Pashto word for nullah and here these are tributaries feeding the Indus. The delay caused by the NWFPs intense objection definitely had weakened WAPDAs resolve besides delaying the approvals. The year 2003 /04 saw a lower interest rate scenario and resulted in the Finance Ministry making this comical objection to the project in the second ECNEC meeting of 07 Jan 04. Inspite of an excellent feasibility with an energy tariff of US 2.17 cents (with financial costs) it was rejected after reaching ECNEC. A great technology demonstrator was delayed and Vision-2025 crippled. Mr. Shaukat Aziz and some of his financial wizards began to show quixotic tendencies during this period (2003-2006). Clearly the inflow of financial aid grants and renegotiations post 9/11 had given them a false feeling of euphoria and well being. There was a brief period when he had declared that no loans above 5% p.a. will be acceptable. He even set about to terminate loans in the pipeline above 5% p.a.

Clearly the CS NWFP Mr. Shakeel Durrani had challenged the Federal Power Ministrys jurisdiction. NWFP was not willing to respect its own minutes of June 02. Keyal Khwar after construction by WAPDA was to become an asset of NWFP providing the social and economic benefits to Kohistan. It was to be a pioneering project able to serve as a high head technology demonstrator to unlock the huge hydel potential of the Indus-Kohistan region. In late 2004 after the ECNEC decision to ignore the PRC MOU the NWFP Authorities gave up their claim to construct Keyal Khwar HPP. Not only 4 years of low cost high head hydel generation were lost but an opportunity to purchase a hydel project at USD 0.75m per installed MW is irretrievably lost. The EPC / fixed price level unheard of in 30 years. The PRC contractor was never compensated for the feasibility studies. The German KFW Authorities quickly offered to finance the project and preparations for tendering are afoot. Cost of the project will now be nearly double. WAPDA and the nation has lost incredibly but who cares? Mr. Durrani had served the oil lobby well.

Sad events at Pak Railways : Coincidentally this example also concerns Mr. Shakeel Durrani when he served his first term as Federal Secretary Ministry of Railways and Chairman Railway Board from Oct 04 to March 07. He quickly convinced himself that the Rohri to Lahore Modern Signaling Project was wrongly awarded to CMC a PRC Corp. and withdrew unilaterally the LOI without any formal enquiry. He refused to accept that there had been four rounds of tendering between Aug 01 and March 03. He ignored the fact that the Railway Board had approved it. CDWP had recommended the project on 24th Jan 04 and finance ministry had approved the revised commercial package / loan in early July 2004. He took an arbitrary decision and had the audacity to send a diabolical and false memo to the President in Oct 05 when the CMC local rep wrote a memorandum to the President that Pak Railways unilateral withdrawal of the Modern Signaling LOI was the cause of the triple train collision on 13 July 05 at Ghotki/Sarhad station in Sindh. Perhaps the worst train accident in railway history. Mr. Durranis memo is based on a draft/unsigned estimate of a competitor. In tandem he fed false technical information to the Planning Commission and succeeded to stall the formal approval of the PC-1 by ECNEC so that the formal contract may not be signed. CMC had been awarded the LOI on 03 July 03 by the full Railway Board tender committee. An Agreement for Award of Contract was signed in the Great Hall of the People on 03 Nov 03 in the presence of the Honorable Presidents of both countries. A culmination of the Railway Modernization and Rehabilitation Plan agreed during President Musharrafs first State visit to PRC in January 2000. The Rohri-Lahore PC-I was withdrawn in 2005/6 on Mr. Durranis instructions from the Planning Commission and divided into 4 smaller sections. New tender costs received in 2007 for 2 sections Lodhran-Khanewal-Lahore (435 km 31 double line stations) show a shocking escalation of the project. Around 270% above CMCs agreed rates of 2003.

The key technology offered by apparent lowest bidder BT (Bombardier) in 2007 is identical to what was offered by CMC in 2003. BT was infact a nominated sub contractor in the CMC tender / LOI / pre-contract Agreement. CMC refused to participate in the 2007 tenders. The comparisons in cost of the CMC Agreement duly recommended by CDWP on 24 Jan 2004 and the 2007 tender prices show a price difference of effectively 270% or more above the CMC Agreements price level of 03 Nov 2003. The CMC scope of work had covered + 810 KM 65 double line stations. The total cost with BT interlocking for stations and 250 locomotives equipped for main line auto-block signalling was USD 110.8 mn. Tenders in 2007 cover 435 Km 31 double line Stations and 160 locomotives equipped for auto-block signalling at a cost of USD 137mn. Again the nation suffered due to a bureaucrats arbitrary style and his apparent mistrust of China. Was he following instructions to discourage Mouization! Mr. Durranis historic remarks to the PAC (and AG) investigation on the PRC supplied diesel electric locomotives were a great shame as he attacked his predecessors without realizing these locomotives were encountering minor teething problems (floor cracks and ventilation issues). He now threw out a great opportunity since 1947 to modernize the mainline signaling between Rohri to Lahore at a cost which was less than 50% of world prices. The Diesel Electric locomotives he criticized so blatantly were purchased at a fraction of international prices. The Economic crimes committed by Mr. Durrani have perhaps no precedent in bureaucratic annals. Was it greed or incompetence or megalomania? Subsequent advice by Fed Minister Sheikh Rashid Ahmad to let the decision be taken on new tenders is a shameful cover up. The man who proposed in Sep 06 the bullet train between Lahore to Rawalpindi and even advertised for its Expression of Interest cannot be declared innocent of the criminal negligence with the CMC Modern Signalling Agreement signed in the Great Hall at Beijing.

 Market ethics and practices:  The ethics and practices of the Pak market are also seriously flawed. Perhaps it is the only market in the world where fakes and sub-standard products are produced or imported with impunity. In most cases the buyer is aware that he is purchasing poor quality. There is no institutional control. Both public and private sectors are unable and unwilling to speak-up. Low prices are encouraged at the cost of quality and safety. The # 2 Syndrome is an all pervasive and disruptive mindset. Easy money is the mantra. Are the institutions including the PEC willing to change these practices? Let us prepare an electric fire manual and educate people to avoid the fires caused by poor wiring and fake protection equipment. Genuine 99.9% electrolytic copper good earthing practices and leakage current control being critical.

The market credit system within the trading community especially in the engineering and materials area is scandalous. Just as predators like alligators and sharks stalk their prey in water the merchants and stockists await the naive and fresh blood. It is a vicious dog eat dog story that has destroyed lives and businesses. I estimate that more than 50% of returning expatriates fall prey to these predators. It dampens entrepreneurship and market goodwill. The market place which has an abundance of fly by night traders and quick money artists will never be a happy land. The media ignores this malady.

 The situation of the steel re-rolling industry is probably the most disheartening. Based on scrap melting it can only compete through electricity theft. The load shedding of winter 2007 / 08 has made this industry absolutely untenable. Prices have doubled. Since the partial collapse of our ship breaking industry near Karachi on the Mekran coast line we are dependent on imported steel scrap primarily shredded  ISRI 211. We have already a very low consumption of steel per capita. In India during 2004 they utilized 35mn tons per year. This was around 30kg per capita. The Indians have a target of 200mn tons by 2020. Assuming that their population remains static this would be an increase of nearly six times in 16 years. China used 300mn tons in 2004. Therefore China already achieved 300kg per capita. Pakistan has per capita utilization below India. During a lecture in Dec 98 at the GHQ after Armys takeover of WAPDA I had advised the COAS that please consider electricity theft as a GoP subsidy and eliminate this evil in steps. Attempts to stop it overnight will bring chaos in the market. Give them a year to clean-up. As an example; the max axle load of trucks if enforced will result in very few trucks on Pak roads. Bad habits take a little time to change.

The health pollution and sanitation issues:  First requirement of civilization is clean water and effective sanitation. We pay lip service. We keep our house clean and throw the garbage on the street. The belief that running water is clean even if it is sewage or industrial effluents is very dangerous. A Unicef report states that worldwide; safe drinking water and sanitation are basic to human survival dignity and productivity. Lack of these fundamentals is one of the main underlying causes of malnutrition disease and death in children. Over 1 Bn people including millions of children lack access to safe drinking water. More than 2 Bn people lack access to sanitation. Pakistan is amongst the worst in Asia. Hepatitis is rampant. TB is re-emerging.

Pollution is the other menace resulting from auto and unchecked exhaust. Particulate matter (PM) should not be more than 70 micro grams/cum. PM is a complex mixture of extremely small particles and liquid droplets. It could include nitrates and sulphates organic chemicals metals and soil /dust particles. Also acceptable Nox standard is 40 but in city centers including Lahore it is around 100. Nox is the generic term for a group of highly reactive gases all of which contain nitrogen and oxygen. It is primarily a result of fuel being burnt at high temperatures. High arsenic content in ground water is very harmful and caused by unchecked effluents. We all understand that PM Nox and Arsenic are responsible for severe health problems and countless mortalities.

In Pakistans 50000 + villages 1000 + towns and major cities we find that pools of stagnant and dirty water create millions of colonies for mosquitoes (and flies). Union councils town committees and municipalities have stopped trying to eliminate this menace. Again Indians and Chinese are doing better at fighting malaria because in the villages all three nations lack drainage infrastructure. In India they may not be able to prevent the malaria parasite but are developing health centers to destroy it within 24 hours of infection to avoid complications. The Chinese whose generally cool weather is helpful use new malaria parasite killers such as Atamisanan plant.

Prenatal care and gynae centers in villages and rural areas are non-existent. Trauma centers for accident victims and other injuries are only available in few hospitals within the large cities. The mountainous regions of Pakistan are also suffering from all the above shortcomings as the rural areas of the plains. Where there is no piped water the water-borne ailments such as diarrhea are rampant killers.

It may be appreciated that President F. D. Roosevelt under the new Deal of 1932 had invested heavily for malaria control in the swampy areas of the TVA seven states region. To facilitate and encourage the settlers extensive malaria and disease prevention was considered as important as water resources and fertilizer production.

PPIB (Private power and Infrastructure Board Islamabad):    Since its creation in the early 90s this organization has been used firstly as a project office of the Federal Ministry and as a convenient bypass of WAPDA. The official objective being very noble i.e: to provide a one-window facility to Investors from the Private sector. The manner it has been used is open to debate. It has also been exceedingly popular with Federal Minister Mr. Aftab Sherpao in the period 2002-2004. Later his successor Mr. Liaqat Ali Jatoi has also found it a convenient organization. To everybodys surprise they have offered two rounds of hydel IPPs in the last 3 years. Several investors came forward for projects in the 50MW to 700 MW range. The sovereign site risk guarantees as demanded by the investors will never be possible for the PPIB to offer. There is a geological site risk and a hydro flow site risk factor. PPIB due to obvious political reasons will avoid the hydro flow site risk. This is a dilemma and I do not visualize any serious headway unless the hydel sponsor does not want site guarantees. The most illogical hydel project which PPIB recently tried to attempt was the 960MW Tarbela 4th Extension in 2006 / 07. Only a bandit could have attempted such a private project on Pakistans only mega dam on the Indus main stem. Who will decide the water sharing between the public sector and private sector power houses? Dams may not have two power houses. There are several safety issues as well. No wonder that a clean man like Mr. Khalid Rehman resigned in 2007 the M.Ds Post at PPIB. The decks were kept clean for arrival of the man who has the blessings of the Presidency.

Nepotism:   Attrition of human resource has for long been a major drag on Pakistans development. It is part of the worldwide brain drain phenomena where developing countries continuously lose their educated youth to the developed world. Economic factors are normally predominant in this decision to migrate. However nepotism lack of justice and lack of job opportunities for the educated are also major factors for disappointment of our middle class youth and also the elite. I rank nepotism as the most unacceptable form of behavior. Yes we have a feudalistic culture but some methods used at different levels of Government can only be described as immoral and cynical. Here below is an example of nepotism by the head of state.

Mr. Fayyaz Elahi former WAPDA Xen Mechanical (Coal Power Station Directorate) under GM Thermal is a charming personality. His credentials are however based on the worst kind of nepotism and intrigue. He is from Burhan (District Attock) and passed his Higher Secondary (F.Sc) in second division. Through official influence of then in service Lt. Gen Jahan Dad Khan a friend of Mr. Fayyaz Elahis father Major (Rtd) Mehboob Elahi he became a Pak Army engineering cadet also known as DN (Defence nominee). According to unofficial information Mr. Elahi obtained his B.Sc. Mechanical Engg. degree in second division in approximately 7 years instead of the scheduled 4 years. However he did not serve the Army for a single day in uniform. Uncle Lt. Gen Jahan Dad Khan arranged for his release on compassionate grounds.

 Mr. Fayyaz Elahi while a student married Miss. Raheela who is a first cousin sister of President Musharraf. The remarkable fact about Mr. Fayyaz Elahi is that after a very short spell of service in WAPDA Faisalabad Thermal Power Station he arranged in 1977 through uncle JD Khan for his transfer to Head Office Lahore. He managed to spend the next twelve years on appointments within WAPDA Head Office Lahore. Having a good command of the English language he was selected for training in USA with a group of major coal thermal power consultants. In this period he befriended Mr. MK Malik Joyya the proprietor of M/s. Ravi Motors M/s. Emkay Corp M/s. Joyya Enterprises. Mr. Joyya a childhood friend of Dr. Mehboob ul Haq had been introduced in 1985 to WAPDA business as well as some major PRC corporations. Mr. MK Malik Joyya received orders in 1986 for Chinese units 3x210MW for Jamshoro P.S. and in 1987 for 150MW Lakhra Lignite coal P.S. this time for Dongfang China. All orders were received by Mr. Malik Joyya on exclusive negotiation or single tender basis thanks to the patronage of Finance Minister Dr. Mehboob ul Haq. Mr. Fayyaz Elahi was WAPDA Xen Head Office Coal Power Stations responsible for coordination of negotiations between Dongfang Corp and WAPDA during 1987. This lignite coal fired unit has never become fully operational. The main problem being poor design of lignite handling systems and combustion control.

 Mr. Fayyaz Elahi was transferred in late 1988 to Faisalabad P.S. He immediately took long leave after few months of absence and joined M/s. Ravi Motors / Emkay Corp. as project coordinator of Lakhra Lignite Coal P.S. under construction by Dongfang. In this period he was able to secure Canadian Immigration. He returned to WAPDA service after about 18 months. Through contacts of Mr. Malik Joyya he succeeded around 1990 to be transferred on secondment as Deputy Secretary Federal Ministry of Water and Power Islamabad. On the sudden passing away of Mr. Tanvir Azhar Director General of Private Power and Infrastructure Board (PPIB) in Jan 95 Mr. Fayyaz Elahi began to manoeuvre for this high profile job. While PPIB was under the Federal Ministry of Water and Power the job requirement was post graduation and relevant experience. Mr. Elahi lacked both qualifications but due to the great influence of Mr. Malik Joyya over President Leghari he was able to secure this job. Before the fall of Mohtarma Benazir Bhuttos second government in Nov 96 Mr. Fayyaz Elahi escaped to Canada reportedly via Thailand with a large sum in cash. He had earlier boasted to his friends that some investors in PPIB unable to achieve financial close had forfeited their performance bonds. Mr. Elahi had proposed a way to arrange refunds under mutual arrangement. It is not known if anyone benefited but Mr. Elahi received some huge advances from project sponsors. The PPP Government was pursuing him when Lt. Gen Pervez Musharraf Corps Commander of Mangla Garrison assisted him to leave Pakistan by being able to convince President Farooq Khan Leghari of Mr. Elahis victimization by the political Government. President Leghari as Minister of Water and Power in the first PPP Government had been involved initially for Mr. Fayyaz Elhais transfer from WAPDA to post of Dy Secy at the Ministry. Clearly Mr. Elahi had not resigned his PPIB job nor handed over under the required procedure. Since the takeover of Gen Musharraf in Oct 99 Mr. Fayyaz Elahi has been coveting this job. Otherwise as an associate of Mr. Malik Joyya he remained fully involved within Pakistan during the military rule. Mr. Fayyaz Elahi returned as M.D PPIB in early 2008. Clearly his two major qualifications. Firstly being a longtime friend  of Mr. Malik Joyya and secondly the fact that Mrs. Raheela Fayyaz Elahi is first cousin of President Pervez Musharraf.

Mr. Fayyaz Elahi has actively helped Mr. Malik Joyya in negotiating without tenders the PEPCO contract for Nandipur 425MW+ combined cycle P.S. based on GE Gas Turbines to be supplied by Dongfang. Mr. Elahi is also a PEPCO Board Member by virtue of his PPIB job. A happy coincidence for both friends. Mr. Elahi is now endeavoring to place a similar 525MW order on Dongfang for CKM site. Mr. Fayyaz Elahi and Mr. MK Malik Joyya are old friends and PPIB is the best platform for playing games. We would all clap and say hip hip hurrah if PPIB would not have the reputation of being the nations dirty tricks company created and used to destroy the national institution; WAPDA leading to ever greater financial haemorrhage.

   Educate understand your assets/endowments and strengthen national institutions: This is only possible when the elite and the educated are able to educate the youth and the nation about the ground realities. Through honest leadership devoid of nepotism it is possible to demand sacrifices and cooperation of the people. In the 21st century good work is not enough. Excellence is required at all levels. Is our leadership prepared? Is our middle class and youth prepared? Our labour class is definitely not educated!

The first causality of a breakdown are that the national development debate process breaks down. In Pakistan all major projects have become controversial after 1971. Big projects can become controversial due to the clash of interests but a balance and harmony has to be created. Just look at the manner in which we have sidelined the engineers. The generalist has decided that he will take all the decisions. It is like a group of priests who decide to takeover all the operation theaters in all hospitals of Pakistan.  Their logic is that if the patient dies during an operation they are responsible for correct deliverance of the soul therefore they may takeover while the patient is still possessing it. Unfortunately medicine and meta physics have to be kept isolated. The generalists has a right to question the plans if the returns do not match the expense but he may not transgress in the technocrats planning project execution and operational domains. This was reasonably under control in the pre 1971 era although some major decisions were take against the engineers advise. Now we see how the provincial politicians and bureaucrats are browbeating the engineers and ignoring recommendations on irrigation and energy projects. Over 28 years of hydel development has been lost. How will we catch up? The issue is whether the national leaders will allow knowledge-based planning. The affairs of WAPDA are a good example to analyze. The privatization process of WAPDA should have ensured that the transmission wing NTDC remains independent of the Gencos and Discos. It should never be privatized. Who will relieve the bottlenecks in the transmission system? Its extension and control is a continuous process. It must remain integrated under one organization (WAPDA / PEPCO). WAPDA was a dynamic organization where politicians and bureaucracy could not interfere. WAPDA could always find the commercial capital. It had reliability. Therefore NTDC must stay inside WAPDA / PEPCO. Wings of PPIB have to be clipped so that WAPDA / PEPCO may restart its new thermal projects. The transmission system is critical but not a value added activity. Some 80% of the costs of WAPDA / PEPCO are generation related. Only 20% are the transmission system costs. Therefore transmission losses even if high are not responsible for expensive power tariffs.

A tragedy averted: The engineering profession has not been treated as an autonomous activity since 1980s. National Planning had become so weak and privatization slogan so endemic that on 22 March 95 an attempt was made to have an international tender of more than USD 1 Bn in less than 8 days (opening date 30 March 95) for the privatization of the 4th 500kV circuit Jamshoro to Lahore via Rahimyar Khan (east bank). If the French had not protested the sole bidder National Grid (a sister coy of National Power) would have been today owner of NTDCs largest asset and NTDC would be paying rental. The burden on the nation would have been unbearable. It may be appreciated that 500kV also known as Extra High Voltage (super grid) is the backbone of the Pakistan transmission system. Two complete 500kV north to south circuits exist from Jamshoro to Gatti (Faisalabad). In the south Jamshoro is connected to HUBCO on the Mekran coast. In the north Gatti is connected to Tarbela Dam. The 3rd 500kV circuit Jamshoro is nearly completed and its route also falls essentially on the east bank of the Indus then via Multan to Gatti. Also a spur via Sahiwal to Lahore. To have given parts of the unfinished 3rd 500kV circuit (including sub-stations) and the complete 4th 500kV circuit to NGC UK under a BOM concept would have been extremely cruel to the people of Pakistan. This is not a value added activity and NTDC / WAPDA would never have recovered financially from this infrastructural mishap.
24)    A symphony of facts concerning irrigation and power sectors:
Let us remember that barely 3% of the world water resources are sweet and potable. From these about one-third are accessible or exploitable as rest are underground or in glaciers and icebergs. It was in 1997 that a comprehensive assessment of fresh water resources of the world was prepared. The U.N. and the Stockholm Environmental Institute noted with great concern the following features of the un-folding situation. By 2025 two thirds of the world population will live in those countries in which the efforts to achieve economic growth and social progress will be hindered given the continuation of the current water usage and management policies. The water use has grown at more than twice the rate of the population increase during the 20th century. In 1995 20% of the world population did not have access to safe drinking water and 50% lacked proper sanitation. At any given time approx half of the people in the developing world are suffering from sickness associated with unclean water. Please note:
 WAPDA has become the chain of the federation by harnessing the resources of the Indus basin irrigation waters. It represents around 20% of the national asset base of Pakistan and is effectively the backbone of the economy. Its privatization is not acceptable. It has been a welfare utility based on the most successful TVA model of USA. Its distribution assets must revert to the provinces under the 1973 Constitution. Let the provinces decide the fate of the Discos (Distribution coys) so that the federation is not damaged. WAPDAs balance sheet has been made weak by the thermal IPPs and privatization lobby. Can it build large multi-purpose projects needed for survival of Pakistans irrigated agriculture? The food black-hole around USD 2 bn and the energy black-hole primarily due to thermal IPPs (around USD 4 bn pa) would be ever expanding. Secondly WAPDA is the largest sustainer of the local engineering industry and generally low cost energy is the second pillar of industrialization. WAPDAs situation has already affected 25000 technicians the most serious human resource crisis since the Bangladesh debacle. The best have left the country.

WAPDA is to raise Mangla Dam height by 45ft and hopes an additional 3 MAF would be available for irrigation. Studies have shown that this premise is not correct. Except during abnormal floods this additional water would not be available. The studies show that during six years in ten the raised dam would not fill yet we plan to spend US$900 mn (Rs. 60 billion) or more when the advantage would occur every 30 years.

iii)     Breaking the poverty cycle has been the goal now for 50 years. The engineers as a group are agitating for use of our plentiful indigenous resources. The Kalabagh Dam (KBD) for example could generate 14000 GWh (14 billion units) per year. Through irrigation benefits Kalabagh could pay back its entire cost in one year. Besides Kalabagh would be a replacement reservoir to Tarbela and both would work more efficiently in cascade. Does any politician have a solution if there is liquefaction of sediment delta (standing few km north of Tarbela Dam) due to seismic activity?

     Worst fears of engineers legal experts economists workers organizations and university professors had come true with a two page executive order dated 24 Oct 98 signed by Muhammad Saeed Mehdi Principal Secretary to the Prime Minister under the heading of Restructuring Reforms and Privatization of WAPDA. It was the complete takeover of WAPDA power assets without blinking an eyelid. PEPCO may not be free to do whatever it pleases including liquidation of WAPDA assets.

Please remember WAPDA had surpluses before 1995 and would periodically give loans to the GoP and self-finance the local component. WAPDA could not become financially more dynamic as it had to finance a callous rural electric network expansion for 28 years. The influentials and regional subsidies denuded WAPDA and not the usual corruption by its low paid line staff. The utility function of power distribution billing and collection was never intended to be part of the WAPDA charter.

vi)     WAPDA has indeed become the chain of the federation because it supplies the bulk the irrigation water to the provincial irrigation departments and has developed an equally successful national High Voltage grid system which receives power from its dam based hydel power stations in the north and its thermal power stations in the central and southern locations. By harnessing the resources of mother Indus WAPDA has become the chain of the federation. The ideal Hydel-Thermal energy ratio of 70:30 has to be pursued. Our salvation is indigenous energy both hydro and lignite-coal.

Symphony of facts concerning the industrial energy and technology outlook: Our Industrialization efforts have been stalled and unless our engineering industry is modernized and there is low cost power there will be only consumer goods related push button industrialization. The engineering industry can independently contribute upto 40% of export earnings. It is the first pillar for a sustainable industrialization of Pakistan. Engineers need the platforms under a new deal so that they attempt technology transfer as part of a major Technology Management plan covering material-sciences IT and telecom areas within the concept of technology zones. Software engineering is now the most prolific technological tool for the 4th industrial revolution and modernization of Pakistan. Software/IT exports have to cross the USD1Bn mark. Revival of traditional machine tool industry included.
Some specifics:
Basic industries were never pursued under a coordinated plan . Infact Mr. Shaukat Aziz was basically pursuing three economic goals. Firstly attracting FDI without realizing that basic utilities are social networks of a government and profiteering in these areas of water and electricity is criminal in a developing economy. The investor will create conditions for a net outflow of capital. Private initiative in the fuel cycle however cannot be avoided. He extended the privatization and break-up of WAPDA assets to include the privatization of dams/reservoirs. There are some areas where even the local investor should not be welcome. Secondly instead of establishing basic industries he decided to liquidate the few existing ones under a privatization regime. The Pakistan steel mills being a major example. He succeeded to privatize the major chemical fertilizer factories in the public sector. The correct course would have been an invitation to the private sector to compete by settings up new industries instead of privatizing profitable basic industries. Thirdly he preferred to keep the nations reserves in vaults bonds and securities instead of giving a dynamic programme for uplift of agriculture and agro-based industry in tandem with a rejuvenated engineering industry.

An industrial policy based on value addition was never our national goal since 1947. The opposite happened in India. Since Oct 1999 Mr. Shaukat Aziz and his advisors did not even attempt to understand it. On 8 Jan 07 Mr. Shaukat Aziz while inaugurating a Daewoo bus assembly plant at Karachi (Afzal Motors Ltd.) proudly declared that this plant is part of our vision to make Pakistan a hub of global engineering products and global engineering industry. Clearly someone forgot to inform him that Daewoo Bus company of S.Korea is owned by the Tata Group of India since several years. Also that Pakistan had started progressive manufacture and assembly of many different vehicles; cars buses and trucks since the 1950s. They always degenerated into outdated assembly lines because they did not create R and D sections or understook manufacture of critical components and assemblies such as engine primemovers and transmission systems. The entrepreneurs invariably blamed bureaucratic dis-concern. The Japanese assembly plants after 1980 for different cars and buses have been successful for the local market only. Technology transfer remains highly controlled.

The role of new technologies and the planning Dilemma. Whatever happened to the governments Integrated Energy Plan? In October 2004 PM Shaukat Aziz had directed the Ministry of Water and Power and Planning Commission. As always it was  not followed through. Let us fall back on the existing National Power Plan of the mid 1980s later updated with Canadian assistance (CIDA) after 1990. By 1994 a National Power Plan project (NPP) was completed covering expansion plans upto 2015 (both generation and transmission studies). Some other parallel studies including

A Secondary Transmission System Review 2) System Improvements 3) Thermal Siting Criteria. This National Plan was overshadowed by the PPP governments Energy Policy of 1994 which opened the door for the induction of the private sector thermal generation based on imported fuels. HUBCO was already approved but they were seeking amendments which were now facilitated. Let us fall back on the NPP of 1994 and together with the Hydro VISION-2025 plan for the next decade and beyond.

It is time to see how we could fall back on the indigenous energy resources:
The hydro resources allow over 8000MW high head projects on a fast-track basis. WAPDA has identified four projects in the NWFP worth $874mn as estimated by GTZ Germany. Design of Bunji 5000 MW HPP is at an advance stage.  Both the Northern Areas and NWFP have excellent run of the river sites. The high head list is extensive.
   Solar pv systems are soon to achieve USD 1 per peak watt. Massive solar farms would permit direct DC feed and with help of inverters AC would be created. Domestic and commercial pv systems using batteries and inverters (similar UPS) are also coming down in price (about USD 1.5/ peak watt). Prices of solar thermal collectors of the double concentric design are now below USD 50 per sqm. They must be used to do preheating of boiler water in industry. Hot water could be also available at 60/65oC for use in Absorption cooling and air-conditioning systems as well as homes.

   Wind power tariffs are proving problematic but Pakistan must be introduced to this technology. The true lift off would come when Pakistan would manufacture its own wind power infrastructure similar to the Indians Suzlon group. The Gharo Keti-Bander wind corridor has great potential.

I discuss coal in context of the new clean coal technologies. In sympathy with oil price rise the black steaming coal prices crossed USD 91 in Jan 08. It was around USD 75 in Oct 07. The cement industry imports around 2.5mn tons / year. Unfortunately the local black coal has high sulphur content (around 6%) while imported black coal is around 1%. The saving compared to imported Furnace Oil is over 60%. Indeed the local supply of black coal is limited. The Thar brown coal (Lignite) reserves are estimated at 184 Bn tons. They are low on sulphur and a process to use Thar lignite becomes critical for the economy. Due to high inflammability the power plants location would have to be at mine-mouth. Alternately SNG (synthetic natural Gas) production from Thar lignite could one day sustainably cross 10BCFD allowing export of fertilizer and huge generation of power. SNG is methane gas produced from lignite. The process is well known (Lurgi-sasol). It is the best utilization of Thar lignite as SNG/Gas transmission is more efficient than electricity transmission. SNG /Gas can be a feedstock for fertilizer factories. The future belongs to clean coal technologies hydrogen fuel cells nuclear power and renewables (hydro solar wind)

 Labour: Dignity of labour is dismal and outright inhuman. Whenever the labour element has reacted the industry was closed. Most of NWFP Baluchistan and rural Sind are without industries. A sea change is required on both sides.

Pharma: a basic industry that was targeted to achieve USD 150mn export by 2007. Unfortunately this did not happen because basic R+D and formulations (generic) are not covered by Pakistan industry.

Great minds Great Deeds Great Capability. Lets take WAPDAs greatest engineers as an example. We had Mr. Syed Salar Kirmani CE of the Indus Basin Project in 1950s and 1960s. Mr. Shams-ul-Mulk WAPDA Chairman in mid 1990s Mr. Khalid Mohtadullah Member Water in the late 1990s. Several other great men were part of the water wing of WAPDA. In the power wing we saw legends such as Mr. Inayat Ullah Khan Mr. Ch. Masud-ur-Rehman Mr. Ch. Javed Akhtar and Mr. Saeed Akhtar Niazi They were assisted by dozens of competent men. Great deeds were witnessed. WAPDA was delivering. It had great capability. Its erosion started in 1994. In early 2004 the situation become desperate. Mr. Aftab Sherpao appointed Mr. Muhammad Anwar Khalid as member Power WAPDA. They say it was an open auction not a selection on merit. All engineers must hang their heads in shame. Some of us refused to shake his hand enter his office or even attend meetings where he was present. He had a favourite multi-national and a way was always found to award them contracts. WAPDA had been violated. The nation had been betrayed.

Hubco the predator: It has now been established by WAPDA/PEPCO experts that this 1292 MW IPPs kWh unit cost  has reached US20 cents including fuel pass thru costs.  This is a shameful waste. Assuming that a 1292 MW project generating 10 Bn kWh units per year is wasting one cent the financial affect is atleast USD 100mn/year. This IPP had negotiated with Government of Pakistan between 1985-1992 under World Bank facilitation and signed an agreement but did not commence till the induction of the 2nd PPP government in 1993.  It may be remembered that HUBCO got arbitrary amendments in 1994 which were highly controversial.  Their tariff had reached US11 cents by 1997 (about one year after start-up).  The boast by Mr. Shaukat Aziz that in year 2000 great concessions were extracted from HUBCO are proved wrong and irrelevant.  There is no reason to allow HUBCO to continue with this terrible project unless they can change their fuel to LNG or coal and renegotiate.  The UNIDRIOT principle of the UN charter allows reopening of this one-sided defective project.  Let the people of Pakistan be spared from further ruination at the hands of this predator and mother of all IPPs based on imported oil. Give HUBCO a fair chance to change.

Administrative and Legal Reforms: It is a sad commentary that Pakistan got its 1973 Constitution some 26 years after its creation. It has been violated and manipulated by nearly all governments since then. Respect for basic institutions including the Republics Constitution will certainly grow as true democracy takes hold. Meantime the nations economic activities continue to suffer. Great minds such as Engineer Masud Hassan have spent a life time trying to educate us on the concept of  Administrative Courts. The simple thesis; the accountability of the executive lies with the executive. Imam Maalik had declared that public interests are supreme. Whereas in English common law you need a precedent. If you dont have one you have a wrong decision. The body has to be found otherwise a homicide cannot be proved. In an executive administrative courts system of justice the body has to be found .It is nearly always found. Napoleanic Law is highly regarded as it has this executive system. You always get evidence when you apply pressure. This system works brilliantly in the Armed forces through their court-martial system. In our civilian administrative system the accountability of the executive by the executive was never tried.

   Pakistan can be again a viable state:  It has to realize the potential through water storages built on a war footing to augement its irrigation and power systems.  At least three KBD size new storages have to be built in the next twelve years.  Another 8000MW of cheap high head power will allow about 20000 MW of Sasti Bijli by 2020 and help make Pakistan an Industrialized and viable state.

Industrialize or Perish (a primer)

PART-II     The short and medium term solutions

AA)  WAPDA again our economic Prime-mover ~ Roll back Roll back Roll back .

Revive WAPDA as per its original charter of 1958. The nine Distribution Companies (DISCOs) may not be taken back but handed over to the provinces inline with the 1973 constitution. Both irrigation water distribution and electric power distribution are provincial subjects. It will be a very logical step. It will stem the rot as the corruption level and inefficiency of DISCOs is reportedly intolerable. Their privatization would be even a bigger folly as 27 years of private distribution after 1947 proved. Let WAPDA be the supplier of bulk water (as at present) and also bulk electric power to the provinces. Design and Construction wings of WAPDA be kept intact as it would take decades to duplicate them at the DISCO level. NTDC the bulk transmission company has to be returned to WAPDA as this is a critical arm of the energy producer. Give the goal of low-cost electric power (SASTI-BIJLI). A five years program at the most. It would involve the renegotiation of some major IPP tariffs. Not a crime under the UNIDRIOT international principles. The nation is finding these Agreements unsustainable and one sided. Strongly recommend cancellation of further thermal IPP projects if not able to meet the tariff criteria. A fall back on indigenous thermal resources however painful. The 2007 USD four billion annual black hole in the electric power system has to be reduced. Ceiling of 2000 MW for imported oil / HFO. Hydel projects below US 4.5$ immediately commenced in the public sector. Run of the river private hydels allowed on raw sites and given fullest support with a fair tariff regime. Public sector may work on several large hydels of cumulative 10000 MW. There are fast track projects (run-of-the-river) having medium to high heads where generation is possible at less than US 3 cents. Bunjis pre-feasibility indicates a capacity of 5000 MW. Let plant utilization factor determine its size. Its location upstream of Chilas has to contend with the challenges of very long transmission lines and the seismic factor. Economic dispatch be strictly monitored and only the least cost solution be favoured.

BB) No Privatization of Dams~ Wake up Wake up Wake up .

There is no question of allowing private control of any major Dam as advocated by Dr. Salman Shah. The proposed fourth extension (by 960 MW) of Tarbela Dam power generation by the private sector based on its fourth tunnel is a great cruelty against the people of Pakistan. Firstly it is a peaking project; able to in a good year generate only about 1900 GWh (1.9 Bn units) of electric Energy. Secondly we may not create competition between the private and public sector for the limited quantity of water available. Who will decide the additional quantum of water to be given to the private power house? Thirdly and equally important is the fact that a Dam may not have two or more power stations as it raises operating costs. This is an established fact.

This project was first conceived in an Inception Report prepared by Nespak/Chas T. Main in May 1991. It was first proposed in 1995 for construction on suppliers credit by Sulzer Hydro by the installation of two turbines on available tunnel No.4. The units were to be identical to the four units on tunnel No.3 but rated higher at 480MW instead of 432MW each. Due to safety concerns it was shelved (sediment sluicing). This project must be kept in the Public Sector. It must involve sediment sluicing from tunnel No.4 which could use a bifurcation to alternate between the power house generation and required sluicing of sand silt and sediment. However the 2000/2001 private sector feasibility by ALSTOM-Neyrpic based on Sulzer Hydros first proposal is not realistic and ignores the three sequential analyses of WAPDAs top water experts between 1994 and 1999. Any extension also involves building a coffer dam (underwater dyke) for the protection of underwater structures etc. The only Dam on the Indus River must remain a public sector project. Can WAPDAs present management led by a diabolical and self-serving Chairman even understand the dynamics of change?

CC)  Limit Private Power. SNG and Nuclear Energy options are also viable.

The nation is unable to rationalize the concept of handing over critical elements of public utility services and prime assets to foreign ownership. How does anyone justify the privatization of a capital intensive power house for a fraction of its cost. Private Power should never have been allowed to go beyond 10% in the mix. Please remember that any one having more than 10% share in a Utility power mix is technically a monopoly. NP UK through HUBCO and KAPCO alone controls nearly 30%. IPPs could be justified using local fuel sources and supplying to critical industrial zones and export processing zones.

Tariffs should not be indexed to USD but to PKR except for the foreign component. Load shedding is with us as long as we are poor and without indigenous hydropower. The concept of energy trading has to be understood by all kinds of energy players. Yes agreements would have to be modified. Pakistans economic sustainability is at stake. Tariff allowed to all the power projects must be reviewed with reference to the actual project cost and current rate of return. After due diligence and with adequate legal cover the tariffs must be revised downwards accordingly so as to reduce the costs. A relevant example for re-negotiation of thermal tariff is Indias Dabhol power plant renegotiations of July 96. The tariff was renegotiated from US 7 Cents to US 5.4 Cents. In the rest of the world electricity prices fell 7.4% average in one year between June 96 and June 97. Tremendous price advantage was obtained by the Australians through coal development and deregulation of private generators. They have the lowest tariffs. Victoria province privatized some of its coal fired thermal stations. They did not sign any PPAs but allowed open market tariff. Fuel was always indigenous black steaming coal. They permitted maximum Australian 4.5 cents for coal fired stations. Due to healthy competition the average tariff came down to Australian 2 cents. The remarkable thing is that most Australian provinces refused to privatize public owned power stations because they had achieved in most cases 94% availability. Each year the tariffs were falling worldwide due to reduced capital costs. The cardinal principle for bulk price is clearly the basis of cost as if the investment were to be made by WAPDA or GoP. Tariffs cannot and maynot be fixed but inline with worldwide trends remain open to a periodic review. In 2007 fuel costs payable to IPPs by GOP / WAPDA crossed Rs 8/Kwh. Theoretically this cost will go beyond Rs 100 /Kwh if oil prices continue to rise.

The Hubco contract had a Reopener Clause under which the tariff could be reviewed and revised based on reduction of risks and actual project costs. The Government did not enter into negotiations with HUBCO to undertake tariff reduction on a priority basis. IPPs in USA UK Philippines and India are regularly subjected to tariff review. Why not in Pakistan? Let us not forget the statement of Mr. Bakke of AES USA on 8 Feb 94 when he conceded on the podium that due to competitive bidding there are projects PPAs at less than US 3 cents in California. The factor of tariff adjustment in 2007 being the international oil and gas cost increase. Other Renewable energy sources including WIND and SOLAR are now selectively feasible for remote grid feeding. Nuclear Power Stations for a country with its own fuel processing and handling have become feasible. They are nominally more expensive than conventional thermal power. Remarkably they do not aggravate global warming. Nuclear energy would require a comprehensive fuel cycle including a reprocessing capability as well as nuclear waste disposal. Since Pakistan has not followed the plutonium route for its weapons programme and it should be allowed fuel reprocessing plants. No new thermal plants based on imported energy be allowed and we have to strive to achieve a drastically reduced ceiling of 2000 MW of imported energy based power houses before the end of 2010. This would mean conversion of some existing thermal stations to gas combustion through Synthetic Natural Gas (SNG). The imported gas if having a reasonable price basis may be considered as a stabilizing factor for our gas Utilities until reserves of SNG are developed. To reduce system losses let us try to bring the industrial load growth close to generating stations. Also shift the bulk of gas resources to northern power stations first so that imported oil/HFO transportation and infrastructure stresses could be reduced. Similarly focus on lignite coal development and mine mouth based power stations using the SNG clean coal gasification route. The engineering and business community of Pakistan correctly rejected the CEPA proposal of 1994 to install two units 660 MW each at Keti Bandar based on imported coal. Thar represents the Eldorado of Pakistans mineral and energy resources and used correctly with the nations untapped hydel potential would change the international perception of Pakistan as a resource poor country and help raise the sovereign credit rating.

DD)  Water Resources / IBIS our prolific asset ~ Understand it ! Let Sind control it?

The three 2004 letters of late Lt. Gen (Rtd) Dr. G S Butt to the President be taken as articles of faith. They are available from the WRDC archives. This great geo-physicist and engineer was highly skeptical of an early completion of Bhasha-Diamer. He was born and raised in Sind where his father was an irrigation engineer at Sukkur Barrage. It was on his advice that I proposed to PM Nawaz Sharif to re-name KBD as Sind Dam and give its lifetime control to the Sind province. I reiterate give the control of the Indus River as allowed under the new IRSA constitution may remain with our Sindhi brethren. Let the lower riparian feel that the upper riparian has nothing to hide and does not intend to steal Indus Waters. Let Sind become responsible for Pakistans most valuable endowment. Punjab NWFP and Baluchistans irrigation water needs may be apportioned by Sind based on the 1991 Accord. The Federation has to be saved and enemy propaganda has to be neutralized. Remember that Sindhis are generous by nature and they have already been given majority control of IRSA in recent years.

The statistics about reduced water flow are misleading. Global warming will increase glacier melt and there will be greater surface flow for the next decades. As one of the main architects of the KKH and as a former Chairman of WAPDA Dr. Butt  understood the ground realities. This he forcefully conveyed to the incumbent Chairman WAPDA its managers and consultants on 30 June 04 during a meeting which was a result of his first letter of 2004 to the President. He was convinced that Basha-Diamer cannot be larger than KBD due to its location. Therefore both should be started asap. A message of the legendary late S. S. Kirmani from the USA was received on the eve of the Conference on Water Reservoirs in the National Economy convened at Islamabad in Feb 1998. Syed S. Kirmani Sahib who was living in USA wrote and I quote extracts of this fax dated 04 Feb 98:

Few countries are blessed with such rich land and water resources as Pakistan. It has also been blessed with an ideal climate for year-round cropping. Many experts point out that Pakistans potential for agricultural production is greater than that of California in the United States. The International Food Policy Research Institutes (IFPRIs) studies identified Pakistan and Thailand as the only two countries in Asia that have the potential for exporting food on a sustainable basis in the 21 century. Despite large hydropower resources Pakistan is depending increasingly on costly oil and coal imports for meeting its power needs. It is time to examine the main causes for Pakistans predicament. It is time to examine why Pakistan has not been able to develop its land and water resources so effectively; why the irrigation engineers base their water demand on historic withdrawal instead of matching water supply with crop requirement; and why important issues such as the amount of surplus river flows available for storage disposal of the Basins saline effluent to sea and measures for protecting the ecology of the Indus delta remain unresolved for many decades. It is also time to ask why Pakistan has not been able to exploit the great opportunities for water resources development opened up by the 1991 Water Apportionment Accord. The Federal ministries should have played a proactive role to build consensus but they remained passive and were unwilling to face the challenges of the issues. Thus everybody blamed everyone else for the lack of progress and the issues became more controversial with time. Pakistans aspirations for realizing the full potential of its rich land and water resources will remain a dream if the prevailing controversies on water issues continue. There is a need for exploring a new strategy that does not suffer from constraints of past approaches and which provides better prospects of success.

EE)  PEPCO. Let it be the special group managing WAPDA

A few bureaucrats under advise of world bank created the concept of PEPCO with the understanding that PEPCO will assist WAPDA for its restructuring. Within one year it became a Frankenstein and the biggest civilian organization of Pakistan was to be broken by PEPCO and made into a group of ineffective companies under the garb of restructuring and partial privatization. PEPCO was implemented around Oct. 1997 apparently by Federal Secretary (Water and Power) Mr. Javed Burki. Till his retirement in early  May 98 all documents show PEPCO as a special management company. It is known that Mr. Javed Burki while in office had nominated himself as the first Chief Executive of PEPCO. Later it was through an infamous executive order of the PM issued on 24 Oct 98 under the signatures of Mr. Saeed Mehdi that PEPCO was virtually declared as the absolute arbitrator and liquidator of WAPDAs assets. This order was reversed through efforts of colleagues who advised the honorable PM of the reality. Mr. Burki could not takeover PEPCO. Why we are so insensitive to the destruction of WAPDAs balance sheet? Do we not intend to build large dams required to support the irrigation system of Pakistan? In early 1994 the author received personal assurances from the management of UBS Switzerland that WAPDAs performance and balance sheet can allow an A credit rating independent of Pakistans sovereign credit rating of that time. UBS was willing to sponsor WAPDA in Wall Street for such an exercise. What happened after that is well recognized by all of us. Private Power Policy of 1994 based on primarily imported thermal energy was defective and unsustainable. It was arbitrary and uncapped while the tariff too high. The damage to WAPDAs balance sheet is now clear. No doubt the new management of PEPCO is highly professional and capable of reorganizing/ reviving WAPDA. Will they please speak out for a reversal of the 2007 bifurcation?

FF)  Hydrocarbon Energy Development. Reduce import Component .

Let us analyze the thermal energy consumption. We ofcourse do not include hydropower or any other renewable resource. MTOE meaning million tons of oil equivalent. While gas is the corner-stone of the energy mix worldwide everybody has realized that its supply is not endless. Particularly in Pakistan a severe gas shortage for power generation is predicted by 2010. Indeed LPG local production is also not able to meet its rising demand. Pakistans energy mix of around 55 million tons of oil equivalent (MTOE) has been analyzed in 2005 by GoP as below is compared in 2007:



Cumulative Share%

Commercial Energy share 2007




16.32 mn





27.95 mn





0.227 mn





4.22 mn





6.79 mn




The total thermal energy consumption (indigenous + imported) as discussed above was  predicted to rise seven fold from 55MTOE in 2005 to 360MTOE by 2030. The requirement for power generation is expected to increase eight fold from 19540 MW in 2005 to 162590 MW in 2030. My personal prediction is that it will reach about 80000 MW if Thar coal gasification becomes a reality otherwise the shortage of financing will limit electric power production (hydel thermal nuclear etc.) to about 50000 MW by 2030. In any case Pakistan is running out of useable and affordable energy for the domestic commercial and industrial consumers. There is bound to be large quantity of expensive LNG imports unless a pipeline is built to bring Turkmen or Iranian gas. The participation of private sector in the energy mix becomes exceedingly important by the day. An estimate by the Government of Pakistan predicted in 2005 that the next 25 years would require an investment of nearly US$ 150 bn in the energy sector. The private sectors share was estimated at USD 100 bn.

The costing of LPG in the last few years has been a shameful theatre. This poor mans fuel is now a rich mans dream. Liquefied Petroleum Gas (LPG) is the common name given to Propane or Butane or a mixture of both. LPG is handled and stored at much lower pressures compared to CNG; the state in which natural gas (Methane) is normally stored. The potential market demand for LPG in Pakistan is expected to touch 6000 tons/day by 2010. The local production would be close to 33%. Presently it is 1650 tons/day. The present market supply also includes approximately 200 tons/day via land route or the sea route. This is negligible but the import component will now increase dramatically in the next few years. It is clarified that LPG becomes  available during refining process as a by-product or is extracted from natural gas when it is in the undesirable wet form. Price controls are non-existent?

Pakistan has negligible quantities of oil and could not even maintain 100000 barrels/day of oil production. Therefore thanks to gas reserves presently estimated at 18 trillion cft and a sustainable domestic production of over 4 BCFD (Billion cu. ft / day) the country is saving atleast USD 1.6 Bn/year. There is a constraint caused by infrastructure problems. The gas lobby is convinced that if the Turkmen or Iranian gas pipelines will not be possible then this nation is bound to copy the South African model also successfully applied in the North Dakota USA plant and create gas from Thar Lignite. The Synthetic Natural Gas (SNG) has 95% Methane and displays near identical characteristics of natural gas. It can easily feed into the existing natural gas transmission networks and also provide a direct source for LPG production. Thar coal can produce 2 BCFD of SNG which is in fact capable of generating 10000 MW. Mine mouth gasification will mean negligible gas transmission losses to distant power houses located near load centers. Excess gas/SNG can also create a surplus fertilizer production which is an exportable commodity. One can feel optimistic about Pakistans fossil fuel/hydrocarbon reserves as Thar Lignite coal fields are estimated at 184 Bn tons. Only the lignite reserves of USA (273 Bn tons) are greater. In thermal energy terms this resource gives Pakistan a higher hydrocarbon potential than Saudi Arabia. The large plants have economies of scale and production cost of SNG can also work out to about USD 3.50 per MMBTU (Million BTU). An SNG plant for 2 BCFD as discussed above is estimated to cost USD 3 Bn. Therefore on a national level the indigenous lignite coal reserves can lead to self-sufficiency in gas/SNG. The SNG concept as developed by Lurgi is not an abstract concept since Germany fought the Second World War on this fuel arrangement. It is true that Pakistan has never utilized more than 4 mn tons of coal per year.

Lakhra Lignite is now its vital energy challenge. India thanks to its larger more accessible Bituminous coal reserves uses atleast 400 mn tons/year a major economy statistic. However the intention to allow a 1000MW power plant on Thar coal at a tariff of US 10 $ per unit is an illogical and damaging thesis without an ICB. Shenhua PRC in 2004 refused to work on US 5.48 $ and demanded US 6.5 $ because they were required to build the required infrastructure including piped water to site as the underground water is not suitable.

GG) Industrialization under a crash progamme: low cost energy a vital input .

The privatization (read liquidation) of HMC and PMTF would be myopic. These two heavy industries (together with the POFs) form the back bone of the strategic industrial programme that was accelerated in early 1961. It is another story that the fruits of this programme are still to be fully realized. The imperatives for Pakistans industrialization have not changed inspite of lapses of concentration by our nation. What is additionally required is the launching of a modernization and up-gradation programme for both these industries instead of a tragic liquidation programme which could be the case if these marginally profitable units are privatized. Let us remember that machine tools and other precision mechanical technologies together with a disciplined technical workforce are prerequisites for industrialization.  The modernization of both requires DUAL-USE waiver from the US Administration. The original technology suppliers (Oerlikon Buhrle Switzerland) their successors or others in Europe are not willing to come forward without this DUAL-USE issue being settled amicably.

The so called engineering industry sector provides the structure on which stands the entire industrial programme (the equivalent of the human skeleton in the body system). On its own the engineering industry can be a major export earner. Countries like Malaysia and Thailand have achieved nearly forty percent (40%) exports based on their engineering industry including electrical and mechanical equipment precision machines assempties jigs and dies transportation vehicles industrial plants etc. Therefore a modern engineering industry has a direct bearing on its entire local industry while proving a major player for export. Hopefully our nation will treat this as a wake up call because we have very limited time to revive our fortunes. Let us show a little more understanding of the collective wisdom and legacy of those who contributed so much to give us direction and hope. PMTF is a remarkable legacy of President FM Ayub Khan Lt. Gen. Iftikhar Ahmed and the Swiss electrical engineer and mathematician Dr. A. Gerber (ex Industrial Adviser to the Planning Commission). The HMC exists today because of the above three and dozens of dedicated individuals in the Federal Planning Commission. The HMC/HFF complex is indeed a superb and vital gift by the Chinese people and a testimony to the wisdom of Chairman Mao Zedong and Premier Zhou en Lei. During my endeavours to reconstruct the outlines of the original industrial policy I have observed some great acts of cross border friendships. The progress of Pakistan was uppermost in their actions. Above all the bureaucrats and functionaries of State at all levels atleast understood their primary task was to facilitate not hinder progress. This culture started to vanish after the loss of East Pakistan. The Karachi Steel Mill (1.1mn ton/yr) and fertilizer plants (2.6 mn ton/yr) constructed by Mr. Z.A. Bhutto were very creditable breakthroughs in the basic infrastructure. However most of his nationalizations were impulsive and unnecessary.

The ultimate objective of such a resource utilization is a rapid industrialization based on technology transfer through our own engineering industry. Engineering industry at the vanguard of a potent industrialization effort; permeating into all branches of industrial production. These two heavies mentioned above would form the inevitable locomotive of such a policy. The machine tool industry is the mother-ship of all industries and not only for the engineering industry. The HMC (and HFF) represents the apex of our forging machining and assembly capabilities. Profit motive cannot be always guaranteed and therefore the public sector has to remain active. If we take away generation capability from WAPDA and precision centres HMC or PMTF from the industrial mural we create black holes and voids that cannot be filled by the private sector. BECO and other heavy private steel shops could have complemented them.

In Phase-I we would need to concentrate on first the basic systems we are still missing e.g. electric generators between 0.5 MW and 50 MW. Prime Movers for electric generation transport and industrial locomotion including steam drives gas turbines hydro turbines and large diesel engines. Basic earth-moving machinery including bull-dozers excavators and loaders. Large compressors valves and pumps for process utility and agricultural applications. Manufacture of basic instrumentation for industry transport and utilities.

In phase II a number of major industries in the area of applied electronics lasers robotics artificial intelligence gas thermodynamics hydrogen fuel cells nano-technology advance materials and composites are the other critical areas for public sector involvement. Each is equally important and their development must move in parallel. Let us not ape western nations which have a private sector with a disciplined and trained labour force. Instead we have a private sector that purchases second hand machine tools in the FPS outdated system. Can they absorb or sustain one hundred new CNC precision machine centers every year? No wonder we have failed to standardize our engineering/industrial products nor create an engineering export industry.

Industrialization includes mechanization of agriculture farms agro-based industry. Remember that nearly four-fifth of Pak exports are agro-based including textiles. The ground realities in Pakistan and the time left at our disposal does not permit further inaction. Together with a national energy policy that is predominantly based on our own natural resources we need today a technology intensive industrial manpower training programme similar to war training methods which develop the group reflex; instead of years of theoretical class room work. A revolutionary industrial policy could then be launched. It is a do or die situation. A budget of US$ 5 bn is estimated for Phase-I spread over a period of five years. The civil administration in this technology zone may be through a management council with managers independently responsible for one industrial project and specific training area. The Phase-II of this industrial programme may also be of five years. The experience of the first phase will help the managers to determine the course and direction of the industrial workshops. One thing is certain that for both stages the choice of equipment and processes is the most crucial factor for success. Outlay on science and technology has to be increased to atleast 5% of the GDP. Definitely a part of this filters into the proposed industrial crash programme whose major funding of US$ 5 Bn in 5 years has to come from international capital markets. Above all a close liaison of the civilian and military engineering capability has to be maintained. It develops logically if encouraged. The Defence Industrial managers and procurement agencies would need to ease their registration protocols to encourage the civilian sector (public and private) which is at present in a dismal state.

HH) Financial Scenario ~ Use your assets. Raise debt for development

The deficit in fiscal and budgetary terms is growing at an alarming speed. It has further aggravated the crisis as we cannot produce more (and ofcourse export more). Short term borrowing by the public and private sector institutions is not going to be helpful in the long run. OECD-Helsinki 1992 is a watershed in the financial bazaar. The 25 rich nations decided that the cake will be shared by many more nations of the former second world and that concessional financing on bilateral basis was to be discouraged. The energy policy based on imported fuel has the potential to be the single most damaging blow to our economy in 2007. The POL import bill is around USD11Bn and growing. A vicious upward tariff scenario that will dampen industrial development and is a sure recipe for national bankruptcy.  The IPP capacity payments are payable in foreign currency as per implementation guarantees even when un-operational. Does the Pakistani nation have an industrial infrastructure which could generate USD 500mn per month in tariffs?

Does anyone expect to pay the cost of imported energy from village electrification? Due to high tariffs the financial burden on the Pakistani nation will become unbearable and could result in a situation where the currency rate changes every hour and inflation becomes uncontrollable. Above all a break down in the financial balance is inevitable which would plunge Pakistans credit rating again to the pits. The nation would have to selectively tap the world capital markets with its potential now upwards of five trillion dollars in private mobile capital (the IMFs of the future). The world market capitalization is around thirty trillion USD and growing. I have proposed in Feb 1998 the formation of a Karakorum Glacier Fund as part of the Pakistan Resource Capital. The objective being initially to increase water storage by 12 MAF and in ten years inspite of sedimentation of the existing reservoirs the IBIS would have additional 20 MAF storage. The first hydro phase could involve upto USD 25 Bn investment which will include the cost of strengthening of the IBIS. New reservoirs would allow 5000 MW of hydro-electric power. In addition another 10000 MW of hydel power from run-of-river projects. Private hydel sponsors must receive comprehensive hydrological and geological site risk cover from the GoP.

The key to revival of both public sector and private sector institutions including strategic heavy industry rests with their capability to indulge in good asset management. The assets must reflect true market value and not historical values. Without permission to negotiate commercial financing many large public sector corporations in Pakistan have become terminally ill. During 1992 IMF reacted to Pakistans first motorway project involving commercial credits and directed public sector organizations to use their own asset base virtually prohibiting sovereign guarantees of the state monetary institutions. Corporations rated A or A+ are able to issue their own corporate guarantees and instruments thereby acting as their own bankers within generous limits. The tragic alternative would be wholesale privatization including sale to outsiders leading to an uncontrollable cost increase of utility services and elimination of industrial potential in the area of high technology. Destruction of our already depleted technical manpower resource will follow.

II)     Tech Frontiers:~ new sources of Energy and vocational centers of excellence.
Let us understand that in Feb 2004 the Bulk gas price in Pakistan was around USD 1.5/mm Btu or less than Rs 100/mm Btu or Rs 100 / mcft; where mm means one million and m denote one thousand. This was a highly competitive price basis. Since four years the bulk gas price is rising and will approach 77% of the international price of oil. This is the result of having signed flawed agreements for gas field development. Since oil is no longer cheap there will be very serious consequences. Nearly as serious as the HUBCO and the 1994 IPP agreements. Therefore it is expected that with HFO already at Rs 41000 / Ton Coal at Rs 4000/ Ton LPG between Rs 1300 to Rs 1500 / mm Btu the price of natural gas will soon be above Rs 500 / mm Btu. Thar lignite coal gasification/SNG route is unavoidable.

The time for renewables has arrived. The future belongs to hydropower but also to solar power windpower and hydrogen fuel-cells. The World Energy Report predicted in Nov 2005 that USD 17 Trillions (USD 17000 Bn) would be required worldwide by 2030 to meet the energy challenge. As energy demand will rise by 50% the emissions will also unfortunately increase by a similar percentage.

The state of Pakistans polytechnics and vocational institutes is depressing and dismal. Visit the Punjab Governments Polytechnic in Lahore near the Railway station and one understands why they are unable to train students in the industrial practices. Extremely poor discipline in these vocational institutes is endemic. They number around four dozen in the country and offer 3 year diploma courses. Another thousand sub-standard vocational centers teaching different trades have been established.

There is an excellent example to emulate. A training centre proposed and initiated by Dr. Engr. A. Gerber when the PMTF was under construction. The Pak Swiss Training Centre (PSTC) is producing world class metal workers and die makers in Karachi. PSTC was established in Sep 1965 with the assistance of the Swiss Government (Swiss Contact). It is located in the premises of the PCSIR at Karachi. It has spawned the IIEE Automation Institute a degree awarding college in Karachi later affiliated with NED. It was developed as a corollary to PSTC in 1985 as a result of a study by Swiss Experts. The Ministry of Science and Technology through PCSIR is again involved. Pakistan definitely needs a private initiative for vocational training. Capability in the country for 250000 students every year is the bare minimum.

Industrialize or Perish (a primer)

Severe attrition of water reservoirs and the private thermal power policy of 1994 have given the economy an unsustainable liability. Soon the bulk of the national gas will also be controlled by foreign capital (an IPP like situation). It will further aggravate the energy and power tariffs. The SASTI BIJLI slogan has to be implemented to revive major industrialization and assist agriculture. Strategic industries such as PMTF and HMC may not be privatized. Otherwise the private sector be given the ultimate support to strengthen the local engineering industry. Technological milestones need to be identified. The key to revival and rejuvenation of public and private sector institutions including strategic industry rests with their capability to indulge in good asset management. This must include access into world capital markets. The truth is that WAPDA which is the True Economic Headquarter of Pakistan is mortally weak and cannot use its balance sheet any longer to construct major power projects. Its decline was willful. While the IBIS is an asset today of atleast USD 400Bn the WAPDA hydro assets are also estimated at USD 60 Bn. The IPP lobby led by National Power (NP) alone controls HUBCO and KAPCO (over 3000MW). It is a dangerous monopoly that needs to be corrected. We have not lost the war. The pendulum has swung to one extreme. Let it be brought to center position and Pakistans future be secured. Let WAPDA again build its own thermal and hydel projects as per its charter. The IPPs role is to be finally capped to below 10% of the power mix. The IPPs have to compete for tariffs with the Public Sector a model already being used in the developed world. Privatization of Utilities be strictly forbidden. Let NTDC the bulk power transmission company be returned to WAPDA and the DISCOs given under provincial control inline with the constitutional requirements. The GENCOS responsible for WAPDAs thermal generation (now under PEPCO) and WPPO responsible for interfacing with the IPPs have to develop a least cost concept and be controlled by one entity WAPDA inline with the 1958 charter and the 1973 constitutional provisions. PEPCO may revert to its role as a special management company. An inhouse management consultant that may control this vital organization. Above all the role of reservoirs in the national economy has to be understood if Pakistan is to survive with dignity and a minimum level of prosperity in the comity of nations.

The expected flooding due to global warming has to be catered for. The leadership has to find a political solution to the agitation by elements in NWFP and Sind provinces. The Indian factor has to be identified. It is not just a battle for the hearts and minds of ill-informed brethren. It is the battle for Pakistans survival. As important as any other struggle being waged today. The Indus Waters Treaty of 1960 is sacrosanct and India must continue to respect it. Even after 30 years the rights of the lower riparian cannot be usurped by India under any international law as the treaty has given the three Western rivers to Pakistan till eternity. Pakistan desperately requires new storages and the world knows it. Without this the poverty cycle cannot be broken and uncontrollable anarchy lies ahead in this nation of 170 million souls. The role of sweet water is central to Pakistans financial sustainability and survival. It is blessed with five of the seven largest glaciers on the planet. This is the biblical truth that may not be violated.

The Quranic verses Sura XIV IBRAHIM (Verse-32) Sura XXVII NAMAL (Verse 60 and 61) and Sura FURQAN (Verse 48 to 50) are some of the divine messages on water that may not be ignored if we wish to remain a living nation. The Indian factor has to be understood. Several difficult decisions will have to be taken and the self-seeking policies of Mr. Shaukat Aziz must be permanently rejected. Industrialization through a real technology transfer will have to be managed. Local energy sources will have to be the primemovers of the industrial programme. The vultures are circling.





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