Power Vacuum

Afternoon prayers are over, and a throng of male worshippers has congregated outside a small mosque in Lyari Town to gaze at a man in a hard hat: an electrician. Balanced high on a ladder, he reaches into a tangle of power lines on the side of an apartment building and, with an unsentimental snip of his wire cutters, surgically removes a thick strand from the snarl. It lands in his truck below with a thud. The men squint up in the muggy heat of the late-September afternoon, watching the lineman toss down wire after wire.

An employee of the city power company, Muhammad Ali is a fixture on the streets of Lyari, a notoriously lawless part of Karachi, Pakistan’s commercial capital. Ali has the Sisyphean task of keeping the self-styled City of Lights lit — and electricity bandits at bay. Each day, he collects up to 20 kg of illegal connections, and each day, after he leaves, many residents tap back into the grid. Haji Umer, an 80-year-old who lives in the building that Ali is working on, says he doesn’t steal power, but he understands why his neighbors do. They find the electricity expensive, and the power cuts frequent and long. “It’s so hot and dark inside,” Umer says. “We don’t have any choice.”

Pakistan is one of the most dangerous places on the planet. It’s besieged by militancy — over a few days in late September, three back-to-back attacks took place in the city of Peshawar, killing more than 130 people. After U.S. troops withdraw next year from neighboring Afghanistan, the bloodshed might worsen if the Taliban become emboldened. Pakistan could even become an exporter of terrorism. Such violence, coupled with widespread urban crime and the decades-old conflict with India, has made the government devote about 19% of its annual budget to the military — money that could otherwise go to development.

A strong economy would improve livelihoods, give hope for the future, and undermine extremism, often a desperate resort for the marginalized. But the lack of reliable electricity has contributed to holding back prosperity. Over the past five years, GDP growth has averaged 3%, too low to fight poverty and create jobs. Demand for power outstrips what the country can produce and deliver. Planned and unplanned electricity outages of 12 to 16 hours daily nationwide hurt business, aggravate unemployment and spark angry protests. Over the summer, riots erupted in Bannu district in northwestern Khyber Pakhtunkhwa province after the state shut off power because customers weren’t paying their bills. “The tolerance threshold has gone down,” says Imtiaz Gul, executive director of the Center for Research and Security Studies in Islamabad.

Pakistan has ample energy resources: an estimated 186 billion tons of coal, over 100,000 megawatts of hydro potential, and wind potential of up to 346,000 megawatts. But the technology and investment to exploit these resources are limited. An overreliance on imported fuel — over 30% of Pakistan’s energy is from plants that burn furnace oil — has exposed the country to high oil prices. There isn’t enough money to keep the system — a mix of private and state-run enterprises — running or to fix faulty infrastructure that leaks electricity. Nor is there enough capital to develop cost-effective, energy-efficient alternatives. “It’s a sequence of problem after problem after problem,” says Abid Qaiyum Suleri, executive director of the Sustainable Development Policy Institute (SDPI), an independent think tank in Islamabad.

Heart of Darkness
Pakistan is not alone in its powerlessness. South Asia as a whole is running on empty — insufficient investment, poor planning and corruption dog the region’s energy sector. The average South Asian uses 517 kilowatt-hours of electricity per year, compared with 12,914 in the U.S., according to the South Asian Association for Regional Cooperation. Each country’s factors are different: a massive, unresponsive bureaucracy in India; a fast-growing population in Bangladesh; war in Afghanistan; old technology in Nepal. But the consequences are the same. The energy deficit and the reliance on oil imports affect livelihoods, pull cash-strapped governments into debt, and draw money away from basic services like health care and education — which particularly hurt the poor. If the region were operating on a full tank, its economies would be more productive and its societies happier. “There is an all-around drop in output and welfare because of the lack of power,” says R.K. Pachauri, director of the Energy and Resources Institute in New Delhi.

Pakistan’s government says the energy crisis is costing the economy up to 5% of GDP a year, or about $10 billion. After winning a general election in May, Prime Minister Nawaz Sharif pledged to end the power outages, or “loadshedding,” within four years. In his administration’s first 100 days, officials reduced the demand-supply power gap from 5,000 to 3,000 megawatts, partly because a strong monsoon enabled hydro plants to operate at maximum capacity, and partly because a paring down of the sector’s debt allowed some stalled power generation to start. A recent injection of $5 billion by the state has helped. Also, as part of a package of reforms tabled to the International Monetary Fund, which just lent the country nearly $7 billion, the government is reducing its energy subsidies to consumers and businesses. “If we do not solve the energy problem in the next three or four years, [Pakistan] won’t be safe,” Khawaja Muhammad Asif, Minister for Water and Power, tells TIME. “We will ultimately end up with no electricity, no water, no employment, no money. This is very critical to our survival.”

Lines of Battle
If Pakistan is ground zero in south Asia’s struggle for power, then Karachi is the crucible for the fallout. The city of 21 million is home to over 15,000 different industries and a robust network of political and religious militants, kidnappers and extortionists who have sown chaos in the sprawling megalopolis for years. Much of the violent crime happens in areas controlled by gangs, leaving them virtually off-limits to authorities, not to mention electricians reading meters. Karachi Electric Supply Co. (KESC), the private firm that provides power, has carved the city’s grid into areas of good and bad customers. The good customers, who live in neighborhoods where the majority of residents pay their bills and don’t steal, are rewarded with zero planned loadshedding. The so-so customers get a few hours of outages. The bad ones, who live in areas like Lyari where company records show people are not paying bills and are illegally hooking into the grid, get up to 71/2 hours of planned cuts every day. Because the company isn’t able to cut off individual households, customers are rewarded or punished as a group. “It’s a winner-takes-all kind of thing,” says KESC chairman Tabish Gauhar. “They are either all beneficiaries, or they all suffer.”

Withholding power from the city’s most troubled neighborhoods, where plenty of law-abiding citizens also live, has created resentment against KESC. But KESC says this is the only way to circumvent Karachi’s dysfunctions, improve the company’s service and become profitable. In 2008 the Abraaj Group, a Dubai-based private-equity firm that specializes in emerging markets, injected capital into KESC and took over the company’s management. The new team has cut the workforce from 18,000 to 10,600. After the first big round of layoffs in 2011, sacked employees surrounded KESC’s Karachi headquarters and burned cars outside. The company has stood its ground, and last year KESC made a profit for the first time in 17 years, though a modest $29.4 million.

Pakistan’s energy crisis is bigger, however, than the successes and failures of one company. Most of KESC’s power plants operate on domestic natural gas, but the supply of gas for power has been squeezed by demand for the fuel for transport, fertilizer production and household use. That means not all of KESC’s gas turbines are running at full power. Unplanned cuts have been piling up on top of the planned ones. (Hospitals, which are guaranteed uninterrupted power, run their own backup generators, as do many businesses and wealthy households.) The Karachi Chamber of Commerce and Industry reports that, in addition to the impact of loadshedding, the reduction of government subsidies has raised the cost of electricity, forcing factories to cut work shifts. “Everybody is scrambling for a solution,” says chamber president Muhammad Haroon Agar. “If unemployment gets worse, law and order get worse.”

For many, it’s too late. In Saeedabad, a neighborhood in an industrial district in western Karachi, the streets rumble with the clacking of power looms as hundreds of small mills pump out fabric for domestic and export markets. KESC has designated much of this area as a priority industrial zone, with no scheduled power cuts, but the small factories outside the company lines are suffering. One owner, Dorajuddin (who uses just one name), opened Yaqub Silk 10 years ago. In 2008, when business was at its peak, he had 25 employees. Today he has downsized to five. A long, rectangular room that once echoed with the din of the looms is now dusty and quiet, the machines sold and gone. The power is out for at least eight hours a day, Dorajuddin says. Between that and the recent hike in energy prices, he thinks he’ll be lucky to stay afloat through the new year. “It’s hard for me to explain how sad it makes me to see this empty room,” he says. “I opened a business to grow, not to shrink.”

Switch It On
Still, in other parts of Pakistan, things are worse. There are more hours of the day without power than with it, and private firms are not always working overtime on fixing the problem. The new government is pushing coal (over oil as a fuel), hydro and wind, and encouraging greater privatization of power generation, transmission and distribution. The idea, said the government in a policy statement, is to morph from an “energy-strapped importer of power to a regional exporter.”

Given that foreign investment in Pakistan dropped from $5.4 billion in 2007 — 08 to $1.4 billion last fiscal year, that objective seems overly ambitious. Yet change is taking place. About 100 km outside Karachi, the mammoth white blades of 33 Danish and German wind turbines whoosh slowly over an arid landscape where the Pakistani subsidiary of Turkey’s Zorlu Energy Group started producing power in July. At just 56.4 megawatts, the plant’s contribution to the grid is small. But the potential is infectious. Down the road, two Chinese firms have partnered to set up another wind farm. (The Chinese have also signed up to build coal-fired plants and even nuclear power reactors.) “Wind is free,” says Zubair Ahmed, a 35-year-old engineer at Zorlu who was trained to work at conventional plants. “If we don’t use it, we are wasting our power.”

The other strategy is for the South Asian nations to draw energy from one another. Alliances have been made: Bhutan, the only South Asian nation that is not energy-deficient and has ample hydro power, is supplying energy to India; and, on Sept. 27, India began exporting a small amount of electricity to Bangladesh. “If there’s no energy, there’s no economic activity,” says SDPI’s Suleri. “If there’s no economic activity, there is less earning, less tax collection and less revenue for the government.” When the government has to belt-tighten, he says, “it’s the poorest of the poor who feel the brunt of it.”

In the meantime, Pakistanis try their best to cope. At Karachi’s famed Clifton Beach, neon-lit dune buggies zip around the sand in the waning pink light of dusk. Kneeling camels wait for paying passengers in the wet sand, where vendors have set out plastic chairs and couples wade out into the warm water. The evening breeze is a relief for families who have spent a long, hot day at work and home without air-conditioning or fans. “Cooking is the worst thing,” says Khadija Ansari, who lives in Korangi, an industrial neighborhood, with her husband Mohammad Zahid. The couple sometimes comes here to escape the heat after Mohammad gets off work. “When we left home tonight, there was no electricity,” he says. “It’s a miserable life in Pakistan with no power.” For a moment, the fresh air, the tinkling of an ice cream cart and the smell of roasting corn on the cob are a welcome distraction. Then it’s back to the darkness.

— with reporting by Omar Waraich / Islamabad