As Turkish firms got involved in the Pakistani energy sector, Prime Minister Shehbaz Sharif threw out a novel idea: that they could come and buy the electricity distribution companies. He made this suggestion while attending the MoU signing ceremony in Islamabad between the two countries, which gave Turkish companies exploration rights in three offshore and two onshore oilfields. Mr Sharif said that there was a need for cooperation between the two countries in the energy sector. He was right to speak of the entire energy sector rather than merely the oil and gas exploration sector represented by the companies, because the delegation was headed by Turkish Energy and Natural Resources Minister Alparsalan Bayrakrar. Mr Bayrakrar was the one who said that the recent pledge by Mr Sharif and Turkish President Recep Tayyip Erdogan to receive bilateral trade from the $1.1 billion in 2024, to $5 billion in three years, would only be possible if Turkey developed ventures in oil and gas exploration, the energy sector and the minerals sector. He recalled that he had attended the Pakistan Minerals Development Conference early in the year.
Turkish involvement in the Pakistani energy sector has not been entirely happy. The episode of the Karkey powership in 2010 should be recalled, when Pakistan had to cancel the deal, which eventually went into arbitration, which Pakistan won. Though it was the height of the power crisis, Karkey was charging too much for the power its ship was generating. It should provide a salutary reminder that Turkey may well be a fraternal country, and its government and people may golf Pakistan in high regard, but the government operates through companies and corporations, out to make a profit. Only if Turkish businesses see their way to turning a lira will they operate.
While seeking to sell electricity distribution companies to Turkish companies is a go idea in principle, it may be easier said than done to sell off companies weighed down by large receivables, and which will only make a profit if rampant power theft, often enough by the politically influential, is stopped. It might be recalled that Pakistan’s previous electricity privatization was of K-Electric, to a company belonging to a friendly company, China, and that saga did not end well, even though that portion now seems to be over. Another sale to a company based in a friendly company was that of PTCL to the UAE’s Etisalat. That too faced problems not yet entirely ironed out. The government must tread with caution.
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