Power projects: Security to foreign workers, cost to consumers

0.5% cost of energy projects to be earmarked for security agencies.

ISLAMABAD:

The government has decided to recover from power consumers the cost of security cover being provided to Chinese engineers and other foreign officials working on energy projects in Pakistan.

This comes in the backdrop of Pakistan Army taking over the responsibility of providing security to Chinese engineers, officers and workers in an effort to address Beijing’s concerns over the threat faced by its nationals.

Officials familiar with the development said 0.5% of the cost of energy projects would be set aside for security agencies to help them beef up security of transmission lines and power installations and thwart terrorist attacks.

Finance Minister Ishaq Dar told the Cabinet Committee on Energy in a meeting held on March 3 that the National Security Committee had decided that 0.5% of the project cost would be collected to pay for the security of personnel working on the projects.

This amount would be used to reimburse the security agencies that were forming nine battalions for providing security cover to the foreign personnel working in the country, he said.

The meeting participants decided that the Ministry of Water and Power would issue a policy directive to the National Electric Power Regulatory Authority (Nepra) for incorporating the security cost at the time of determining the tariff for new power projects.

The committee suggested that the 0.5% project cost should be collected under the head of “security of personnel and installations”. The security cost should be added to all energy projects for the security of personnel and installations, it said.

During the meeting, the Ministry of Water and Power shared salient features of the new Power Generation Policy 2015. According to the policy, solicited projects will be awarded after competitive bidding, which will be recommended by the provincial, Azad Jammu and Kashmir and Gilgit-Baltistan governments.

The federal government has also given exemption from income tax, turnover tax, withholding and sales tax and there will be 5% import duty on the plant and equipment not manufactured locally.

Guarantees will be given by the federal government for power purchase while provinces and the power purchaser would have to bear hydrological risk of the hydroelectric power projects.

The government has also provided cost re-openers for hydroelectric power projects with the provision of escalation in civil and electromechanical works, resettlement cost and geological conditions in the tunnel area.

The Private Power and Infrastructure Board (PPIB) will issue a tripartite letter of support for projects initiated by the provinces, AJK and Gilgit-Baltistan.

For liquefied natural gas (LNG) projects, a standby letter of credit or a revolving letter of credit will be issued by the sponsor in favour of the LNG supplier.

After deliberation, the Cabinet Committee on Energy approved the Power Generation Policy 2015 for its presentation before the Council of Common Interests (CCI) in order to take the provinces on board.

Published in The Express Tribune, March 15^th, 2015.

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