Energy-starved Pakistan has already looked west, to Iran, for gas necessary to generate much needed power for the country’s industries and consumers.
Now it’s looking east, to India. Pakistan hopes to import 500 megawatts (MW) from its arch-rival and neighbour, according to Federal Secretary for the Ministry of Water and Power Qazi Imtiaz Ahmed.
Tenders will be issued soon, after the planned deal is formally approved by the federal cabinet, Ahmed told The Express Tribune. He hoped the plan would be approved in the cabinet’s next meeting.
The official said the government aimed to finalise the modalities, tariffs and terms and conditions for the import of power as soon as possible.
“We will invite power supply companies of India for the implementation of the project soon,” he said.
What has already been decided bilaterally is that a 45-kilometre-long, 220 kV line will be constructed within six months of a formal agreement on the project. The agreement will be valid for five years, and will be negotiable for another five years or more.
Meanwhile, a high-level delegation from the ministry is expected to visit Tehran by the end of this month to negotiate terms and conditions for the import of 1,000MW of electricity from Iran.
“Islamabad has asked Tehran to arrange a meeting of the Pakistani negotiating team with its Iranian counterpart by the end of April or by May 10,” Qazi said. Iran’s offer to supply 1,000MW of electricity was made a while back – but bureaucratic obstacles had resulted in a long delay over bilateral negotiations.
Currently, Pakistan is importing 70MW of electricity from Iran for the coastal city of Makran in Balochistan. Tehran is also preparing to export 100MW of electricity to Gwadar within next few months. The secretary confirmed that an advance payment has already been issued by Pakistan to Iran for the Gwadar project.
Failure to pay bills
Secretary Ahmed was candid about the government’s failure to produce enough power. The ministry of water and power had been unable to clear outstanding dues – worth over Rs350 billion – to be paid to power producing companies.
He remarked that there were two major reasons for the massive default: ‘’First, the federal government has not paid a subsidy amount of Rs150 billion so far, secondly, our people have not been able to collect another Rs150 billion from major consumers.”
He added that the total amount that the ministry has to pay to oil and gas companies is not Rs450 billion as suggested by media reports.
In spite of its cash woes, the government will have to build major power producing projects within the next five years – or else, the present shortfall of 6000MW will increase.
The cash-strapped government has also been unable to start construction on the Bhasha Dam project, as it has failed to meet the $11 billion required for it.
The secretary added that the Asian Development Bank (ADB)-led consortium is trying to arrange the required financial resources. He added that the Friends of Pakistan forum is expected to join the consortium.
Published in The Express Tribune, April 22nd, 2012.