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In Brief
POLITICS
“Relations with the US must be repaired but not at the cost of China,” says PM Shehbaz Sharif
On 4 August, Prime Minister Shehbaz Sharif, in an interview with journalists at his residence in Lahore, highlighted that China’s support for Pakistan is not equivalent to the US support for Pakistan. Hence, bilateral relations “with the US should be repaired.” However, this reparation should not be at the cost of its ties with China and vice versa. In this regard, he stated “I think our relations with the US must be repaired, as it is very necessary for Pakistan… But it shouldn’t be at the cost of China… and I had told [the Americans] recently in presence of various dignitaries including Mr Ishaq Dar.” He further stated “I also told them that similarly, the friendship with China is not at the cost of US, as both have significance for us.” He also revealed in the meeting that the China-Pakistan Economic Corridor (CPEC) has shown progress. In the recent Chinese expert visit, there was a positive response in terms of cooperation between the two. He added that the government will ensure the safety and security of Chinese nationals in Pakistan as it has become a matter of concern. He commented that there is no room for “politics” in the relations between Pakistan and China. On Pakistan’s request to China regarding debt re-profiling, PM Sharif revealed that there has been no response from China. (Khalid Hasnain, “What China is doing for Pakistan, US cannot do: PM,” Dawn, 5 August 2024)
PPP says the government should dissolve the National Assembly
On 4 August, Pakistan People’s Party Secretary General Nayyar Bukhari said that Prime Minister Shehbaz Sharif may have to call for re-election in case the “government is under serious threats.” He questioned why the government had not yet approached the PPP for support. He reaffirmed his party’s intention to support the PML-N administration, “provided that it delivers.” Speaking about the recent elections on 8 February, he informed that the PPP had pre-planned to vote for the Bilawal Bhutto-Zardari party. Though the party remained doubtful of the election results, they welcomed them to ensure democratic flow. Other leaders of the PPP have expressed displeasure with the ruling regime’s narrative built against the Benazir Bhutto administration’s contracts with Independent Power Producers in the 1990s. This, according to the leaders, is an attempt to evade responsibility and has further strained ties with the Punjab government. (Syed Irfan Raza and Imran Ayub, “ Stability concerns prompt PPP to push for 're-poll',” Dawn, 5 August 2024)
Imran Khan is willing to negotiate with the military if freed
On 5 August, in an interview to Reuters, Imran Khan stated that his criticism against his “ouster” was directed towards independent individuals and not the military “institution as a whole.” He stated, “The miscalculations of the military leadership shouldn’t be held against the institution as a whole.” For Khan, who has consistently blamed the military for his ouster, this is a complete backtracking from his earlier position. He added, that engaging with generals if he were to return to power would be harmless. He justified the need for a cordial relationship with the military due to Pakistan’s distinct geography and its function in the private sector. He reasoned “Given Pakistan’s geographical position and the military’s significant role in the private sector, it would be foolish not to foster such a relationship.” On 30 July, Khan announced that he was ready to negotiate with the institution only if elections were conducted in a “clean and transparent” manner and the false cases booked against his supporters were dismissed. Khan, however, has completely rejected the idea of any talks with the Shehbaz Sharif government as it lacks public support. He is of the opinion that it would be “more productive to engage with those who actually wield power.”(“Imran open to 'engaging with generals' if freed,” Dawn, 5 August 2024)
JI chief threatens government with an ouster movement if demands are not met
On 5 August, The Express Tribune reported that speaking on the second day on the sit-in outside the Governor House in Karachi, JI Chief Hafiz Naeem-ur-Rehman urged PM Sharif to reduce the electricity prices lest “the situation spirals out of control. He called upon the ruling regime to recognize the demands of the JI as “legitimate rights” of the people. He warned that if this matter is not attended to, then protests will be arranged at the Governor Houses in Lahore, Peshawar, and Quetta and highways will be blocked. Rehman emphasized that JI’s protests were aimed at getting rid of “oppressive rulers.” He also demanded that electricity bills be charged “according to the actual cost.” He warned that if decisions are based on Form 45 then the entire coalition government will have to step down. Hence, “to avoid the wrath of the people, the Prime Minister should accept our demands, or this movement will turn into a government ouster movement.” (“ 'Slash electricity prices before situation gets out of hand': Hafiz Naeem warns ,” The Express Tribune, 5 August 2024)
PROVINCES
Balochistan: Highway closures escalate fuel prices
On 5 August, Dawn reported that due to roadblocks set up by the Balochistan government on several highways, including the Quetta-Karachi National highway since 28 July, the region is experiencing a drastic fall in petrol and diesel supplies. Even the supply of low-priced Iranian diesel and petrol has also been adversely impacted. Those outlets which were able to obtain Iranian petrol have marked up the selling price. According to reports from Zhob, Duki, Loralai, Barkhan, and parts of Quetta, it is being sold at PKR 550 per litre. Nevertheless, Balochistan Petroleum Association member, Qayyumuddin Agha announced that the supply situation is likely “to improve in the next 24 hours.” This development comes due to the continued sit-ins demonstrated by the Baloch Yakhjeti Community, “in front of the Balochistan University and Quetta-Taftan Highway.” Earlier the BYC and the government had negotiated terms and reached an agreement to call off the sit-ins and the restoration of internet and opening of roads. However, a large number of BYC supporters were detained and are yet to be released. Senior Minister for Planning and Development Mir Zahoor Ahmed Buledi stated that a large number of people were released and “those nominated in FIRs” would be released on 5 August. He commented that the BYC leadership too should hold its end of the agreement with “responsibility and seriousness.” (Behram Baloch and Saleem Shahid “Road closures cause fuel shortages in Balochistan,” Dawn, 5 August 2024)
Khyber Pakhtunkhwa: 12 killed, 21 wounded as monsoon rains continue to batter the province
On 4 August, the Provincial Disaster Management Authority (PDMA) of Khyber Pakhtunkhwa verified that about 12 deaths and 21 injuries have been reported across the province in “rain-related incidents.” Flash floods in the province were triggered by monsoon rains. Six people were killed and four individuals were swept away by floods in the Lawaghar Algada area of Karak district. One each was also killed in Lower Dir, Charsadda and South Warizistan district. The floods have also affected Kaghan and Manor valleys, the central bridge on Mansehra-Naran-Jalkhad road was washed away and tourists and locals who were stranded in the valleys for the past six days were forced to vacate through a a temporary pavement created by the Frontier Works Organization. Additionally, the National Highway and district authorities are still contemplating whether the artificial lake at Mahandri should be burst or spillways should be created as huge boulders flown in by the Manor stream have blocked the Kunwar River from flowing. ("12 perish in KP as rains continue to batter country,” Dawn, 5 August 2024)
CPEC
Delays push cost of projects under CPEC
On 5 August, Dawn published that the government has formally requested Chinese sponsors of Sahiwal, Hub and Port Basin to transition from imported coal to Thar coal. This is in a bid to help Islamabad reduce its power generation costs. Pakistan is working towards re-profiling its outstanding debt from China valued at USD 15 billion and rescheduling the debt maturity period to fulfill demands arising out the IMF’s USD 7 billion bailout. The Gwadar power project had been listed as a “fast track project” under the China-Pakistan Economic Corridor (CPEC) signed in 2015. However, significant delays have occurred due to the COVID-19 pandemic, the general slowdown of CPEC projects, Pakistan’s liquidity struggles and the government’s move to shift its power plants to indigenous coal and “replace it with a solar plant of equal capacity” to tame fuel costs and environmental and social considerations. The Gwadar project, established by the CIHC Pak Power Company (CPPCL) forced the previous government to “adhere to the original plan” and run the plant with imported coal in 2023 as the sponsor had rejected its replacement to Thar coal or a renewable source of energy.
On the other hand, NEPRA’s State of Industry Report of 2022 had envisioned the shift mentioned above. However, in the third review published in May, since the cost and tariff estimates were determined in 2018, a 51 per cent increase was seen in the cost of the plant from USD 292.77 million to USD 444.49 million. This new estimate has also shown a 24 per cent increase from USD 358.3 million. This skyrocketing of cost price is owed to the spike in engineering, procurement and construction (EPC) to USD 321.41 million from USD 236.16 million. The Sinosure fee increased from “just USD 2.10 million to USD 32.56 million” and even interest has jumped from USD 17.14 million to USD 45.55 million. The increase in insurance fees is due to Sinosure’s unwillingness to insure the power plant project as the country faces “increased investment risks, such as overdue payments to existing CPEC projects insured by it.” Additionally, the exchange rate of Pakistan has shifted from PKR 105 a dollar to PKR 278.5 a dollar leading to an increase in estimates by NEPRA. (Nasir Jamal “Delays hike up CPEC project cost,” Dawn, 5 August 2024)
ENERGY
Eight member task force formed to reform the power sector
On 4 August, a press release from the Prime Minister’s Office stated that an eight member task force consisting of Prime Minister Shehbaz Sharif has been formed to locate and monitor the “implementation of structural reforms in the power sector.” The PM has also asked for recommendations for reducing production costs. The objective of the task force is to work towards reducing the financial burden on the government arising out of the power sector and to help establish “an efficient, liquid and self-sustaining competitive power market.” The task-force’s mandate includes implementation and is not restricted only to “fact-finding.”The task-force will be fully supported by the government financially and is expect to submit its recommendations its recommendations and plan of implementation to PM Sharif in one month. The task force will be headed by the Special secretary for the Power Division and “effective coordination and consultation” with the Ministry of Energy is to be ensured. (“PM forms task force to fix power sector,” The News International, 5 August 2024)
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