Pakistan News

Minister says loadshedding will be overcome by 2017 end

Minister says loadshedding will be overcome by 2017 end

ISLAMABAD: The Minister for Water and Power, Khawaja Mohammad Asif, said on Friday that the government would overcome power loadshedding by the end of 2017 despite exclusion of Gadani-based 6,600MW coal power plants from its top priority.

Speaking at a hurriedly called press conference, Khawaja Asif said the government had shifted its priority from the Gadani power project due to lack of infrastructure and the need to prioritise the ‘early harvest projects’ that could be completed before 2018.

He said the Gadani-based projects were not expected to be completed before 2019 because there was no infrastructure, including roads and jetty, to support such a major initiative so quickly.

The minister clarified that the government had not shelved the Gadani projects, adding that they “are still open” and if the private sector came forward the government would facilitate it.

Khawaja Asif’s renewed confidence to end loadshedding by the end of 2017 emanated from recent signing of agreements with China. He said Pakistan and China had signed contracts for 8,320MW projects worth $20 billion investment which would be completed between 2018 and 2020.

He said these power projects would be set up across the country without any provincial consideration. He said the Chinese investment was “a good signal for foreign investors”.

The minister did not agree with a reporter that there were allegations of kickbacks and corruption against key government officials working in energy sector departments or complaints of investors against them.

Apparently perturbed over repeated questions about alleged demands by officials of an organisation set up to promote renewable energy for the ‘speed money’ from some investors, the minister said the matter should be taken up with courts as he had done in the case of rental power projects during the PPP government.

He said he had documentary proofs of wrongdoings in three RPPs and went to the court. “You should do the same if you are so concerned and have concrete evidence,” he said.

He said the CASA-1000 power project was being signed in Istanbul and final tariff would be determined by the National Electric Power Regulatory Authority (Nepra). “The first flow of electricity will start in 2019,” he added.

The minister said the recovery of electricity bills had increased by 3.2 per cent in first nine months of the current year and power distribution and transmission losses had dropped by one per cent compared to the same period last year.

The circular debt, he claimed, had come down by Rs70 billion than last year. He said the electricity tariff had come down by Rs4.42 per unit due to decline in oil prices in international market and they could go up again in case of increase in oil prices.

He said the government wanted to bring tariff at the single digit level to end the issue of circular debt and subsidy. He conceded that the government was not operating power plants at optimum level despite decline in oil prices, saying that they would be run to full capacity in summer.

The minister said the government had ensured a peak supply of 16500MW last summer and that level would be maintained this year too. The shortfall at present is also because of the shutdown of Uch power plant due to an issue at the gas field which would be restored in a few days.

In reply to a question, Khawaja Asif said the issue of putting in place a payment mechanism to LNG suppliers was at an advanced stage and it would be resolved soon. “We take advantage in oil supply from Pakistan State Oil (PSO), but we do not want to take risk in LNG supply which requires immediate payment,” he said while referring to oil imports on up to three months of credit — a facility that was not available for LNG.

The minister said LNG would be supplied to Kapco and four Lahore-based power plants, adding that 3600MW electricity through LNG-based power plants would be injected to the national grid in two years.

Published in Dawn, April 25th, 2015

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