Energy crisis threatens to derail Pakistan's growth

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Pakistan has a serious electricity problem. Ask Mohammed Yasin, who sells sugarcane juice from a small, rented shop in Karachi's Neelum Colony.

For months, his business has been suffering because of unplanned power outages, often lasting eight to ten hours.

"I got fed up and finally had to buy this run-down diesel generator," he says pointing to the noisy equipment that is helping turn the wheel of his cane-crushing machine.

"The costs of a diesel generator are a major dent in my earnings, but what else can I do?" he asks.

Mohammed is only one of millions who have been affected in Pakistan; a country where power cuts have become a national frustration, often overshadowing concerns about Pakistan's security situation.

Spontaneous protests by citizens fed up with power blackouts have become an almost daily occurrence in cities and towns across the country.

Television channels regularly show pictures of people setting tyres on fire and shouting slogans to vent their anger at the authorities.

Earlier this month, a demonstration in front of a nuclear power plant in the city of Mianwali, Punjab, turned into a riot.

Industry leaders say power cuts are slowing Pakistan's already struggling economy even further, forcing factory closures and putting thousands out of work.

Supply vs demand

The main reason given for Pakistan's problems is simple; energy supplies have struggled to keep pace with economic growth.

Fawad Khan, an energy analyst with a leading investment firm in Karachi, says that in 2008 Pakistan used to cut power for an average of three hours a day to regulate supply.

However, by 2010 that downtime had grown to six hours on average.

Now, unless drastic action is taken, many fear the blackouts will just get longer and longer.

Analysts say another factor adding to the problems is Pakistan's reliance on oil-based electricity. This has grown from 16% of total output in 2005 to 38% in 2010.

Critics say Pakistan has so far lagged behind in developing cleaner sources of energy as an alternative to the more expensive imported fuel and its own limited gas reserves.

"Most countries in the region like India, Nepal, Bangladesh are facing energy shortages, but our problem is probably the worst," says Aziz Memon, a leading textile industrialist.

Mr Memon says a lack of planning and investment in new power generation has deepened the crisis.

"We have problems of infrastructure, inefficiency and decades of mismanagement," he says.

Internal issues

Karachi, a city of 18 million people and Pakistan's main economic hub, used to be known as "the city of lights".

Today, large parts of it are regularly plunged into darkness.

As well as the perennial problems of creaking infrastructure and a lack of investment, other factors are also conspiring to pull the plug on supplies.

Over the past few months, the city's main electricity provider, the Karachi Electric Supply Corporation (KESC), has been locked in a nasty industrial dispute with the unions over job cuts.

The corporation is trying to lay off 4,500 of workers in an attempt to cut costs and improve efficiency. The employees are fighting back by camping outside the company's head offices as part of an indefinite strike.

As the stand-off drags on, millions of Karachi residents are turning to less regulated ways of getting energy, not least because when they can get power they are often having to pay more for it.

With electricity costs on the rise, pushed up by higher global commodity prices and internal inflation, a growing number of people are stealing the power they need by rigging ad-hoc wires and power meters.

The KESC says it is working on generating and supplying more electricity, but admits it has not had much success in trying to curb distribution losses.

"Despite improvements in some areas, one problem still remains," says Ghufran Atta Khan, a spokesman for KESC. "And that is, we haven't been able to stop about 30% of our electricity from being stolen through illegal connections."

Back at the juice shop there is still no power and the expensive diesel generator is chugging along.

Mohammed Yasin is honest about the stark business choices he faces.

And while he says he will resist the temptation to steal electricity, many others seem unwilling to wait for Pakistan's energy revolution to arrive.