Pakistani cabinet approves formula to deal with energy crisis

The Pakistani cabinet has approved a formula to resolve the energy crisis in the country, media reported on Thursday. According to reports the cabinet proposal has three main aspects: two weekly holidays, the early closure of businesses, and a recovery campaign on defaulters who collectively owe more than Rs300 billion in unpaid electricity bills. Prime Minister Yuusf Raza Gilani chaired the cabinet meeting. The chief ministers were not invited to the meeting although the decision cannot be implemented without their active cooperation. In fact, Punjab and Khyber Pakhtunkhwa publicly criticised the decision immediately after it was reported by the media. The decision to observe two weekly holidays in the provinces will be taken by the Council of Common Interests (CCI), a powerful constitutional body set up to resolve disputes among federal units. The main branches of commercial banks would be exempt from the extra weekly holiday, allowing business to function as usual in the industry. A comprehensive policy regarding this will be framed shortly in consultation with the central bank. The meeting also decided to dissolve the Pakistan Electric Power Company (Pepco) this month and appoint professional management in distribution and generation companies, a move that highlights a rising trend of using the private sector for energy solutions. The cabinet also decided that a uniform electricity tariff rate would be applied throughout the country, a move aimed at ending line losses in the sector. The meeting decided to disconnect power supply to defaulting consumers 45 days after non-payment of bills even if these included ‘sensitive’ connections. Pakistani Water and Power Minister Syed Naveed Qamar said the meeting had decided that provinces would be consulted for implementation of the decision on energy conservation because they had to play a central role in enforcement of business closure after sunset.