Ending load-shedding: PML-N aiming to keep its promise

Would push Chinese investors to add 9,000MW to national grid before 2018 general elections, says Ahsan Iqbal.

ISLAMABAD:

As China and Pakistan sign projects worth around $34 billion in order to generate 17,045 megawatts electricity, the government would push Chinese investors to add 9,000MW to the national grid before the 2018 general elections, aiming to fulfil its promise of ending load-shedding.

Work on power projects of 9,000MW at an estimated cost of about $15 billion would start immediately and will be completed in three years, said Minister for Planning and Development, Ahsan Iqbal while addressing a press conference.

He said 17,000-MW power projects at an estimated value of $33.8 billion were part of the $45.7 billion deals Prime Minister Nawaz Sharif signed in areas of energy and infrastructure during his recent visit to Beijing.

The $45.7-billion projects will materialise by 2025, he added.

Iqbal said 17,045-MW power projects, including the 7,560-MW coal-fired power plants, would be implemented in two phases.

In the first phase, 10,400-MW power projects worth $15.5 billion will be completed. The focus, however, will be on adding 9,000MW electricity to the grid before 2018, said the minister.



In the second phase, 6,645-MW projects will be completed with an investment of $18.3 billion. These projects include investments in building infrastructure at Gaddani Power Park and in transmission lines. The 1,600-MW hydel power plants are also part of the deal.

The country is facing chronic energy shortages, with up to eight hours of load-shedding in urban areas with no respite even during the winter season.

PML-N came to power riding on a promise to end load-shedding in three years, but has so far failed to show improvement in the area.

Iqbal informed that Pakistan was not borrowing any money for the power plants as it was an investment by the Chinese. He said that out of the $45.7-billion portfolio, loan component was only $10 billion, which is an extremely concessionary rate.

He said the government would give only a guaranteed rate of return of 17% in dollar terms and the coal-fired power plants will generate electricity at 10 cents per unit, against furnace oil plants that are generating electricity at 20 cents per unit.

Under the China-Pakistan Economic Corridor, Beijing aims at developing its neglected western parts by using the Gwadar Dry Port as gateway to the rest of the world. In return, Islamabad seeks investments in rails, roads and energy projects.

“Pakistan has to synchronise its development plan with the Chinese or Beijing will find another partner,” said Iqbal, while grilling Pakistan Tehreek-e-Insaf’s chief Imran Khan for what he said “un-called for criticism” against Chinese investment.

He said all these projects were spread across the country, while Gwadar and Thar would be the biggest beneficiaries of the development.

He said the government was not giving special incentives to the Chinese companies and they are coming under the existing power policies.

“Chinese investors did have concerns about the implications of inter-corporate debt. To address those concerns, the government would provide a cushion through a revolving fund for timely payments against power purchases.”

Iqbal said with an investment of $5.9 billion, 832-km long roads will be built, mainly Lahore-Karachi motorway and Karakoram highway. For transportation of coal and facilitating Chinese goods transportation, 1,736-km long rail network will be modernised with an investment of $3.7 billion.

A $662-million package has also been approved for Gwadar that include investments in seaport, Gwadar International Airport, land links, Gwadar hospital and Gwadar Eastbay Expressway.

The $45.6-billion package also includes $1.6 billion underground rail network and orange-line to be constructed in Lahore.

Published in The Express Tribune, November 12^th, 2014.

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