Energy crisis : Govt expected to spend Rs115b on power projects

Centre to arrange Rs32b while WAPDA to provide Rs83b.

ISLAMABAD:

The government is expected to spend Rs115.25 billion on power sector projects in the next financial year 2011-12 to tackle the energy crisis that has caused prolonged power outages, impeded the working of industries and stunted the overall economic growth.

Sources told The Express Tribune the federal government would provide Rs32.5 billion through budgetary resources while Water and Power Development Authority (Wapda) would arrange Rs82.7 billion from its own resources to finance the projects. Of the total outlay, foreign donors will provide Rs13.37 billion.

Sources said an amount of Rs72.29 billion would be spent on projects launched by the Pakistan Electric Power Company (Pepco) with Rs62.22 billion local spending and Rs8.07 billion foreign funding.

The government is expected to spend Rs42.95 billion on 21 ongoing hydropower projects of Wapda that will provide Rs37.65 billion from its own resources and Rs5.3 billion through foreign sources.

Key projects

In hydropower, major projects include 4,500-megawatt Diamer-Bhasha dam, 2,800MW Pattan power project Gilgit-Baltistan, Neelum-Jhelum power project Azad Jammu and Kashmir, Dubir Khawar power project Batgram, Jinnah power project Mianwali and Keyal Khawar power project Khyber-Pakhtunkhwa.

The government is also working on Golan Gol Hydropower Project in Chitral costing Rs7.03 billion and Kuwait is a major donor of the project. The Abu Dhabi Fund will provide assistance for Khan-Khawar hydropower project, Allai Khawar hydropower project and Dubair Khawar hydropower project.

Saudi Arabia is financing the Neelum-Jhelum hydropower project. Total cost of the project has been estimated at Rs84.5 billion and expenditure is expected to reach Rs26.2 billion by the end of June 2011. The government expects allocation of Rs10.8 billion for the project with Rs8.8 billion foreign exchange component in 2011-12.

However, the project has already been delayed as only 22 per cent work has been completed, which may give an opportunity to India to complete the controversial Kishanganga project on the Neelum River in held Kashmir. India is said to have completed 43 per cent work on the Kishanganga project and it will gain priority rights over Neelum River if it completes work before Pakistan do.

The federal government is expected to earmark Rs18 billion for land acquisition for 4,500MW Diamer Bhasha dam. Wapda will allocate Rs2.5 billion from its own resources for construction of the project’s lot one to five.

Wapda is also expected to spend Rs14.57 billion on ongoing 747MW Guddu power project (Genco-11). Total cost of the project has been projected at Rs61.44 billion with foreign funding of Rs47.06 billion while expenditures are expected to reach Rs20.37 billion by June-end.

Another important project is 525MW combined cycle power plant at Chichoki Mallian for which the government may set aside Rs13.85 billion in the next financial year. The project is likely to cost Rs18.05 billion with foreign exchange component of Rs11.99 billion. In addition to this, Rs3.84 billion will be spent on 425MW combined cycle Nandipur power plant costing an estimated Rs22.33 billion.

An amount of Rs1.8 billion may be spent in the next financial year on import of 100MW of electricity from Iran. Total cost of the project has been projected at Rs3.66 billion. The government has decided to launch another project relating to power import from Iran which will cost Rs75 million while the government will earmark Rs25 million next year.

Published in The Express Tribune, May 24^th, 2011.