Energy projects: CM unhappy with Centre’s decision on energy projects

Sindh takes exception to federal govt’s decision to cut life of energy projects

KARACHI: Sindh Chief Minister (CM) Syed Murad Ali Shah has said that any decision regarding electricity generation or distribution by any committee or ministry other than the Council of Common Interests (CCI) is illegal and unconstitutional, therefore all the letters issued by the Cabinet Committee on Energy (CCoE) on power issues must be withdrawn.

This he said while speaking at a meeting on Friday with the Special Assistant of the Prime Minister on Energy, Shahzad Qasim, at the CM house. Principal Secretary to CM Sajid Jamal Abro and Energy Secretary Musaddiq Khan were also present on the occasion.

The CM said that the unilateral and arbitrary decision of the CCoE has created an alarming situation which adversely affects provincial interests. He added that electricity appears at Entry No4, Part-II, Schedule IV, in the federal legislative list of the Constitution and the CCI was the only constitutional forum authorised to decide such policy issues. "Any policy decision by CCoE on electricity is a clear transgression and infringement into the domain of CCI," he said.

Shah said that CCoE has unilaterally directed to reduce the life of solar and wind projects from 20 to 15 years. The CCoE has also imposed selective embargoes on processing of ongoing small hydro, wind and solar projects.

He urged Qasim to continue all the renewable energy (RE) projects possessing letters of intent (LOIs), under the RE with policy of 2006. Elaborating on the RE policy 2006, Shah said that it provided lucrative fiscal and monetary incentives to investors. "It [the policy] offers attractive returns on equity of 17% (in USD) and the power purchaser is responsible for providing interconnection to the transmission lines," he said.  "Wheeling of electricity is allowed and the policy allows net metering and billing and facilitates the projects to obtain carbon credits," added Shah, suggesting that CCoE and Economic Coordination Committee Pakistan (ECC) should not take decisions regarding electricity in the future because CCI is the right forum.

Shah said that if RE projects and tariffs as low as under five cents were not allowed to develop, the public exchequer would continue to bleed by expensive energy and forex [foreign exchange market] outflows on fuel purchase.

At this, Qasim, an energy expert, said that if 1,000 megawatt (MW) RE power projects were installed the government would be able to save Rs14 billion in forex every year. "Therefore, we have to focus on the production of RE projects," said Qasim.

According to the CM, the province of Sindh has a 60 kilometre long and 80km wide wind corridor coastal belt. Shah said that the province of Sindh was known as the 'energy hub' of Pakistan because it has the capacity to produce 55,000MW wind energy in Thatta, 10 gigawatt (GW) solar energy, 130MW hydero [low head and Run of the River], 1,000MW bagasse cogeneration, 500MW water energy - Karachi produces 11,000MT garbage daily, and 550MW geothermal energy. "The federal government is requested to approve the stuck RE projects at its end so that work could be started on the projects and in this more private companies would be attracted," he added.

Qasim assured the CM of his support and congratulated him on almost completing the Thar Coal Mining and Power project. "It was a difficult task but Murad Ali Shah with his commitment made it possible," he said.

On the CM's invitation, Qasim will be visiting the Thar Coal Mining and Power Project on Tuesday. He will be taken there by Sindh Energy Minister Imtiaz Shaikh.

Published in The Express Tribune, January 5^th, 2019.