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No more deadline extensions to six power projects

No more deadline extensions to six power projects

ISLAMABAD: Clearing three preferred energy projects for implementation, the government on Thursday put on hold deadline extensions to about six power projects based on indigenous fuels under the China-Pakistan Economic Corridor (CPEC).

The decision was taken at a meeting of the Private Power and Infrastructure Board (PPIB) on the premise that the deadline extensions would be considered after the finalisation of the National Electricity Plan and New Energy Policy to determine if these projects fit in the demand scenario.

The 113th meeting of the PPIB was presided over by Power Minister Sardar Awais Ahmed Khan Leghari.

“This plan will be of utmost importance in determining the demand and supply scenario of electricity,” said the minister, adding that the National Electricity Plan and New Energy Policy were at final stages of development with full participation of the provinces. “All pending letters of interest (LoIs) issued to sponsors will accordingly be evaluated under this plan,” he said.

Govt to consider the matter after finalisation of electricity plan and energy policy

The two power projects on imported fuels were, however, given deadline extensions. In fact, the fourth mega re-gasified liquefied natural gas (RLNG)-based project, which will be in Punjab and was included in the plan at a belated stage on the request of Punjab Chief Minister Shehbaz Sharif in June 2017, appeared to be progressing on a fast track.

This was evident from an official statement, which said: “Board accorded approval for submission of ECC summary for approval of implementation agreement and power purchase agreement for 1,263-megawatt Trimmu RLNG-based power project, which is being implemented on a fast-track basis by the government of Punjab”.

The board also allowed extension in the financial-close date for a 1,320MW imported coal-based power project at Hub without affecting the synchronisation date of the first unit (Dec 31) and the required commercial operation date (Aug 1, 2019).

The meeting also approved the execution of the implementation agreement with the 660-kilovolt high voltage direct current Matiari-Lahore transmission line project. This consequently allowed the PPIB to execute the agreement for the timely implementation of the project needed for the evacuation of electricity to Punjab from projects that would be based near Karachi and Thar.

A senior official requesting anonymity said a few important projects, including two in Thar, a major hydropower unit in Khyber Pakhtunkhwa and another on the boundaries of Azad Jammu and Kashmir and Punjab besides a coal-based project in Gwadar, had also come up for the extension in their LoIs.

The meeting, however, concluded that their sponsors would have to wait for the finalisation of the energy plan and policy due in about two months. The sponsors are already reported to have been told that their timelines will be based on demand and supply projections to be finalised under the plan and will not be given any guarantee.

The minister was quoted in a statement as saying that the “National Electricity Plan would play a major role in determining the future sources for power generation and reduced tariff, which would be based on international competitive bidding”.

He said the sponsors should diligently pursue their projects so that they are implemented well in time while the practice of granting extensions in accomplishing various milestones should be avoided.

Mr Leghari said there were aspects of the energy crisis that the government was tackling on a war footing, including constraints in the transmission segment, inefficiencies in the distribution system, circular debt and inadequate checks on power theft.

Published in Dawn, January 12th, 2018

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