With Chinese assistance: ECNEC set to approve three nuclear power plants

Published: July 4, 2013

Neelum Jhelum power project will also be considered for approval, despite higher cost. ILLUSTRATION: JAMAL KHURSHID

ISLAMABAD: 

The highest project approval body is set to approve over Rs1.4 trillion worth of projects today (Thursday), including three nuclear power plants of 2,400 megawatts capacity which will be built in Karachi with Chinese assistance.

In total, six projects will be considered by the Executive Committee of National Economic Council (Ecnec) for approval, according to Planning Commission officials. The body is headed by Finance Minister Ishaq Dar.

All these projects have one thing in common – Chinese assistance – and are being approved at a time when Prime Minister Nawaz Sharif is in China to deepen economic relations with the world’s second largest economy.

The body will also consider the Pakistan Remote Sensing Satellite (PRSS) project for approval, which will also be established with Chinese support. The estimated cost of this project is Rs19.7 billion, including a Rs15.8 billion foreign loan component. For the current year, Rs631 million has been allocated for the project.

The satellite will be launched in 2015-16 and carry a high-resolution electro-optical payload with designed service life of five years, according to Suparco website.

Ecnec is expected to approve Karachi Coastal Power project, which is sponsored by the Pakistan Atomic Energy Commission (PAEC). The estimated cost of this 1,100MW nuclear power plant is Rs958.8 billion including Rs692 billion foreign loan.

This project will also be built with Chinese assistance. For the current year, the government has allocated Rs6 billion in the budget for land acquisition.

Karachi Nuclear Power Plant-I (Kanupp-I) and Kanupp-II may also be considered for approval by Ecnec. To keep these projects secret, the government has not added them in the meeting’s agenda, sources said. Kanupp-II will have 1,000MW power generation capacity.

The agreements for implementation of these two projects were signed during the tenure of the PPP government, but later on they were put on hold indefinitely, sources said.

Ecnec is also taking up for approval the 969MW Neelum Jhelum Hydropower Project with revised cost estimates. Started with an estimated cost of Rs84 billion, the revised cost is now Rs274.9 billion, according to PC officials.

The cost increased due to delays, change in design and alleged commissions taken in procurement of machinery and equipment. This revised cost is based on rupee’s value at 86 per dollar. But now the rupee-dollar parity has crossed Rs100.

The government has not included Rs46.2 billion interest cost in the revised PC-I. By including this, according to revised PC-I pro forma, the project cost will be Rs321.4 billion. Of this, Rs155.2 billion is rupee component and Rs166.2 billion is foreign exchange component.

China had stopped processing a $448 million loan for this project due to reservations about two other projects – Safe City Islamabad and a communications project. But with the change in government in Pakistan, chances of finalisation of the loan have brightened as premier Sharif is expected to take up this matter with the Chinese authorities during his ongoing trip, sources said.

Ecnec will also consider for approval the Nandipur Power Plant of 425MW, which is another case of mismanagement by the last government. Against initial cost of Rs22 billion, the revised cost stands at Rs57.4 billion.

The government has added demurrage charges worth Rs1.7 billion to the cost that Chinese contractors will claim from Pakistan.

Published in The Express Tribune, July 4th, 2013.

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Reader Comments (30)

  • jibran
    Jul 4, 2013 - 1:30AM

    built in karachi? Whose idea is it.

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  • jibran
    Jul 4, 2013 - 1:35AM

    Rs1.4 trillion worth of projects. I hope they won’t be executed like the motorway, yellow cab, sasti roti, and metrobus projects. There will be proper oversight, audit, and transparent tendering. I also hope that this time, there will be no kickbacks and commissions, which at the end of the 5 year term be laundered out of the country in 40 suitcases.

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  • ahmad
    Jul 4, 2013 - 1:44AM

    i have there is some progress made on Chinese assistance on bunji and dasu dams. pakistan is in dire need of dams.

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  • Jamshed M
    Jul 4, 2013 - 1:54AM

    How come cost of nuclear power plant is so high? almost 1 trillion Rs or 10b$ for just 1,100MW? cost shouldnt be more than $3b .. even the costliest nuclear power plants which UAE is going to build with korean help will cost 20b$ for 6000MW ..

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  • Hedgefunder
    Jul 4, 2013 - 2:44AM

    Have the Chinese agreed to anything as of yet ? Or is this just another pipe dream, just like Iran pipeline project !
    Don’t build your castles in the air, as that does not provide energy, try dealing with solar as its far cheaper and sunshine does not cost anything !

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  • Syed
    Jul 4, 2013 - 4:00AM

    @Jamshed M
    As we are at receiving end, we don’t have option to negotiate, just sign the deal. Bottom line Pak pay twice or thrice…

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  • D00Doo
    Jul 4, 2013 - 4:46AM

    Nuclear fallout, PK is on a faultline. Not to mention Cost…. More incompetence on the part of the leadership

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  • Gringott
    Jul 4, 2013 - 7:28AM

    And what do the Chinese want in return, might i ask?

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  • NP
    Jul 4, 2013 - 8:49AM

    Why is no one talking about the fact that Karachi is close to a fault line and that it is not safe to build nuclear power plants so close to such a large city. I understand electricity is needed but is it worth putting the lives of millions in danger.

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  • Mobeen
    Jul 4, 2013 - 8:49AM

    Pakistan’s experience in the nuclear power programme provided promising environment to further develop nuclear power generation capacity.It is a good step towards this.With the new cooperation I hope great opportunities for the two countries.

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  • Ali
    Jul 4, 2013 - 8:53AM

    Great News for Pakistan! No chance of any nuclear fallout as all nuclear reactors have requisite safety and security measures. Fukushima was a man made disaster!!!!

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  • Raji
    Jul 4, 2013 - 9:02AM

    This cost is for 6 projects not one nuclear power plant.
    Cost is also not a factor since nuclear energy is cheap and a nuclear power plant has a longer life duration than other sources. Also they will be under IAEA safeguards so they will have extensive safety and security.

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  • usra
    Jul 4, 2013 - 9:07AM

    Appreciatedly, new develpoments are on board in the country with the arrival of new government. Power generation issue is one of the critical issue which is being facing now. This mega structure of cooperation definately opens new chapters of success and prosperity. A new voyage of cooperation is being looking forward which will definately fruitful in facilitating and strenghthening the statehood of Pakistan.

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  • truthbetold
    Jul 4, 2013 - 9:10AM

    Doesn’t Pakistan needs to get the approval from the IAEA and NSG before any new power nuclear power plants can be be built?

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  • yasir
    Jul 4, 2013 - 9:26AM

    Contemporary energy scenario in Pakistan is miserable. Particularly our industry is suffering and aim of maximum yield has been shaken by energy shortfall. It is very crucial for Pakistan to invest in energy sector more to overcome the economic burden. Beside this Pakistan should seek for the nuclear power projects to boost the economy.

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  • uet
    Jul 4, 2013 - 9:55AM

    PPP tenure nothing happened and all of sudden we seeing so much activity
    and what commentators on express do go cynical nuts. No doubt we are such a
    loser nation.

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  • Tooba Mansoor
    Jul 4, 2013 - 9:59AM

    Great Job pakistan!!! its a very good step taken by the government…this would further strengthen the relations between China and Pakistan…and will also open up new ways of cooperation…

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  • yusra
    Jul 4, 2013 - 10:00AM

    A great applause for this mega develpoment. There is a dire need for strenghthening and faciliatation Pakistan’s Power Plants. No matters what the cost it consumed, its a matter of long lasting benefits which Pakistan is going to enjoy. This is a mega project which give a boost to Pakistan.

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  • WIJDAN
    Jul 4, 2013 - 10:27AM

    It’s a really a good news. Now no need to go for electricity and power deal with India. The project is also having strategic importance to maintain a balance of power which had tilted towards India due to its will to join NSG.

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  • hedgefunder
    Jul 4, 2013 - 3:34PM

    @WIJDAN:
    Have you considered as to the time frame involved in building these plants ? Do note that this is Pakistan, and nothing happens on schedule either, so I suppose in meantime during their construction, its business as usual ! More of the Load Sharing and longer black out periods for the people !
    First of all you need the Chinese to actually say YES, then you have various agencies to deal with and finally the Finance Factor, which I really doubt that Chinese will be willing to fund wholly on their own ! So where is the rest of the money coming from ?
    There are too many IFs and When’s , in regards to this proposal. One only has to see the Iran pipeline project to realise the situation in Pakistan.

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  • Gemini
    Jul 4, 2013 - 3:47PM

    @jibran: Yes in Karachi there is a strong reason for that, Nuclear plants need to be cooled down on a specific temperature which requires enough amount of water and Karachi is the largest coast line.

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  • Gemini
    Jul 4, 2013 - 3:49PM

    @WIJDAN: LOL India is already in tension after Gawadar port deal and here we comes with the satellite program :D

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  • The Economist
    Jul 4, 2013 - 4:22PM

    Take it easy and calm down my friend,all this projects will take at least 5 to 10 yrs before it starts operating and provided work is completed on time,and guess what it will take only seconds before terrorist will destroy it

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  • antanu
    Jul 4, 2013 - 5:25PM

    @The Economist:
    is it your foresight or gleeful wish?

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  • Usman
    Jul 4, 2013 - 6:23PM

    By now no one should have uncertain speculations about Pakistan capabilities. It will also help to cut down our energy shortfalls and this also shows that we have experts second to none in the world. Going forward with the space program like Pakistan Remote Sensing Satellite (PRSS) is a significant achievement. This will provide Pakistan with essential know how of operating high tech space satellites and will pave way for future space expeditions.

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  • Cooper Reed
    Jul 4, 2013 - 6:27PM

    Pakistan has constructed a robust case for civilian nuclear technology transfer from western countries for its energy needs but western countries have been dragging their feet. In contrast to the 123 Agreements, the Pak-China agreement is meant for the power generation only. However, the 123 Agreement, which relieves nuclear reactors from IAEA safeguards allowing sufficient fissile material to make around 280 warheads per year.

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  • Hedgefunder
    Jul 4, 2013 - 7:10PM

    @Cooper Reed:
    Yes , like everything that Pakistan does, there is serious Trust deficit too !
    One only has to look at their original source and conduct in regards to this technology, furthermore how they implemented its use and proliferation of it to rogue and unstable states over period of time.
    This was no mistake as it obviously had approval from higher up !
    They have more missiles than can be used,, yet they have load sharing ! Does this really make sense to normal person? I think not, as parts of this Nation are not even within its own Army’s domain ! That speaks volume as to the state of affairs of this Country.
    This is a most serious Failed State on the Planet at present, and that’s why they are being entertained by by the US as “so called partner” !
    But that story is coming to an end soon too ! So what next for Pakistan, is a million dollar question !

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  • Ahsan Ali
    Jul 4, 2013 - 7:44PM

    China has always been helpful to Pakistan, for instance, Gawadar was a power project initiated by Pakistan and China. Now developments of these nuclear power plants will not only boost the greater image of Pakistan and China but will also help Pakistan to overcome its energy needs.

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  • unbelievable
    Jul 4, 2013 - 7:56PM

    @Raji

    Cost is also not a factor since
    nuclear energy is cheap and a nuclear
    power plant has a longer life duration
    than other sources. Also they will be
    under IAEA safeguards so they will
    have extensive safety and security.

    Nuclear energy isn’t cheap especially when you factor in the cost of handling spent fuel and dismantlement. I would also point out that during my lifetime I have lived near two nuclear power plants – both have been closed down because they were too expensive to maintain/fix problems – that experience would indicate your comment implying “long life” is rubbish. Pakistan’s current nuclear power plants have “long life” because you can’t afford to properly decommission them so you let them limp along being “off line” most of the time. The rest of the World is moving away from nuclear power – with good reason.

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  • Hasan AnsarI@
    Jul 4, 2013 - 10:32PM

    @jibran : what’s wrong with Karachi ? And why not ?

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