India-Pakistan tensions and power co-operation

blank Tridivesh Singh Maini
Senior Research Associate, The Jindal School of International Affairs, OP Jindal Global University, Sonepat

Captain Amarinder Singh Chief Minister (CM) of Punjab, during his meeting (April 21, 2017) with Prime Minister Narendra Modi, sought the intervention for sale of electricity to Pakistan and Nepal. According to the Punjab CM, since the state shares its border with Pakistan and its Goindwal Sahib thermal power plant is situated close to the international border, logistically sale of power to Pakistan would not be a problem.

The Indian premier reacted positively to the Punjab CM’s proposal, and in fact urged Captain Singh to explore more avenues of cooperation, especially trade, with Pakistan. Significantly, the sale of electricity to Pakistani Punjab had been first mooted by the earlier Shiromani Akali Dal government. Former Deputy CM (Punjab, India) Sukhbir Singh Badal had mooted this idea during his visit to Pakistan in 2012, and had discussed this with Pakistan Punjab CM, Shahbaz Sharif and brother of Pakistan PM, Nawaz Sharif. A piece of land had been identified, in Patti (Punjab, India) for establishing a grid. Later in 2014, Adani Enterprises, sent a delegation to Pakistan to explore the potential of sale of 500MW of power to Pakistan. Tensions between both sides have stymied the potential of power cooperation, and the recent mutilation of  the bodies of two Indian soldiers, Naib Subedar Paramjit Singh, and BSF head constable Prem Sagar on May 1, 2017 have once again increased tensions and reduced the scope for any possible cooperation. There is in fact a growing clamour for India to remove MFN status to Pakistan, as was the case after the Uri attacks last year.  MEA spokesman, Gopal Baglay clarified however, “MFN status to Pakistan is an obligation from WTO. All members have to extend to each other, its with others also not just Pakistan,”.

Power shortfall in Pakistan

If one were to examine the rationale for sale of power from Indian Punjab to Pakistani Punjab, a study by top Indian Business School, Indian Institute of Management (IIM) Ahmedabad, in 2016, titled ‘tariff and related matters: The electricity sector in Punjab’  highlighted Pakistan’s energy profound energy deficit, and batted in favor of energy sale to Pakistani Punjab.

The shortfall in Punjab (Pakistan) is estimated at about 5,000 Megawatts. According to the Times of Islamabad, the total production of electricity has come down to less than 10,000 megawatt (estimated at 9400MW) due to water scarce reservoirs, whereas demand stands at nearly 15,000 MW (14,700MW).

Due to a severe decline in power production, and a sudden rise in demand, load shedding has witnessed a significant rise. In recent times, power cuts in urban areas are estimated at 8-10 hours, while rural areas witness load shedding of up to 10-14 hours. Pakistani Prime Minister Nawaz Sharif, in the 2013 Manifesto of PML-N made a firm commitment, that his government would tackle the load shedding issue, and take concrete steps to deal with the energy crisis.

While there are some who are skeptical about the prospects of sale of power as a result of the unstable relationship between both countries. The Captain Amarinder Singh government has reduced the electricity rate to Indian Rupee (INR) 5 per unit for all types of customers. Currently, the Punjab State Corporation Limited (PSPCL) sells surplus power at INR 3.40 per unit to the grid. More significantly, Mahindra and Reliance have evinced interest in selling electricity at the rate of INR 1.50 per unit and INR 1.75 per unit respectively to Indian Punjab’s government.

In Pakistan, National Electric Power Regularly Authority (Nepra) sells electricity at a rate of 11 Pakistani rupees (INR 6.75) to the customer including the subsidy provided by the government. In November 2016, Pakistan imported electricity at the rate of 10.63 Pakistani rupees (INR 6.50).

India-Bangladesh ties

Significantly, Indian power export to Bangladesh is one of the key aspects of bilateral cooperation between both neighboring countries. Currently, Bangladesh imports 600mW power from Indian grid, having first link between Baharampur in West Bengal and Bheramara in Bangladesh’s Khulna division has a capacity of 500mW. The second 100 mW capacity line connects Tripura’s Surya Maninagar (about 60 kilometres from the state capital of Agartala) with Comilla division in Bangladesh. A proposal for a third link is also being examined, which will be laid from Assam’s Bongaigaon to a suitable interconnect point in Bihar through Bangladesh but this will provide part of electricity through this line.

Interestingly, it was the state of Tripura, led by Manik Sarkar, which has been seeking to enhance connectivity with Bangladesh, and to further develop power linkages and sale of 100mW electricity. Bangladesh had cooperated with India, and its waterways were utilized for transportation of oversized cargo from Kolkata (West Bengal) to Agartala (Tripura) before installation of the Palatana power project in Gomati district, about 60 km from Agartala. India is supplying 100mW of electricity in return of Internet bandwidth (10 gigabits per second) from Bangladesh. Both these initiatives were launched via video conferencing between Hasina and Modi in March 2016, in the presence of Sarkar. Even during Hasina’s visit in April 2017, there was a strong thrust on further developing energy linkages and connectivity.

Punjab CM’s earlier efforts

The Indian Punjab CM has been an advocate of better relations with Pakistan, and in his last tenure, he was at the forefront of strengthening ties with West Punjab (Pakistan). Singh established a strong rapport with his then counterpart, Chaudhry Pervaiz Elahi and also met with then President General Pervez Musharraf during his visit. Apart from seeking to promote cultural ties between both Punjabs, Captain Singh and Elahi both had made concerted efforts to find common ground in the economic sphere. One of the significant achievements in the context of bilateral trade between India and Pakistan has been setting up of the Integrated Check Post at Attari, though due to the exacerbation of tensions, trade has not really accelerated, and hovered around 2.5 billion USD.

India has made efforts for over one decade to strengthen economic ties with its neighbours including Pakistan, while those including Bangladesh have been pragmatic. The same can not be said of Islamabad – or at least large sections of the establishment. Till Pakistan sheds its zero-sum approach, even cooperation in areas like Power seems a far cry.