NCC reviews troubled projects

Energy ministry suggests stopping work on foreign-funded unit-II of Jamshoro plant


Shahbaz Rana February 26, 2021
It was informed that 14 foreign-funded projects, including those for power generation, transmission and distribution, amounting to $3.4b with the support of development partners, including ADB, World Bank, Islamic Development Bank, were under implementation. PHOTO: FILE

ISLAMABAD:

The energy ministry on Thursday recommended scrapping a foreign-funded 660-megawatt unit of coal-fired Jamshoro power plant that remained problematic.

The ministry gave its opinion in a meeting of the National Coordination Committee on Foreign-Funded Projects (NCC-FFP) that met to review the status of six problematic energy projects worth $2.8 billion.

Headed by Minister for Economic Affairs Khusro Bakhtiar, the NCC had also met over three and a half months ago and discussed the possibility of dropping two energy projects.

However, the NCC did not take decision on cancelling a $304-million loan for unit-II of the Jamshoro power plant and asked the energy ministry to take up the issue at a relevant forum, like the Cabinet Committee on Energy.

In November last year, the committee discussed the scrapping of a $400-million ADB-funded smart electricity meter project and winding up the 660MW second unit worth $304 million of the problematic Jamshoro power project.

The Ministry of Energy on Thursday told the committee that the government should drop unit-II of the Jamshoro power plant, which was not moving ahead, sources told The Express Tribune.

The ministry informed the committee that after stopping the construction of unit-II, the cost of electricity generation by unit-I would still be below the cost of coal-fired Sahiwal power plant, said the sources.

Prime Minister Imran Khan had set up the NCC with the aim of fast-tracking work on foreign-funded projects. The NCC, which has so far remained a debating club, needs to take prompt decisions to save money that the country pays on undisbursed foreign loans as commitment charges.

The ruling party often blames bureaucracy for the slow decision-making. But most of the time it is the political leadership that falls short of expectations.

Pakistan had obtained a loan from the Asian Development Bank (ADB) for the Jamshoro project in 2014 and the scheme was planned to be completed by 2019. It remained problematic due to faulty decisions by both the ADB and the Power Division.

During the past seven years, the Power Division could not resolve even land-related issues. Despite the troubled status of unit-I, the government went ahead with plans to arrange over $300 million from various lenders for the unit-II.

The meeting also discussed the smart meter project but did not take decision on its fate. The energy ministry has repeatedly highlighted the faulty design of the project, which at the initial stage had been planned to be executed in areas covered by Lahore and Islamabad power distribution companies.

The meeting was informed that there was some progress on four other problematic projects, including the Dasu hydropower plant.

An economic affairs ministry handout stated that the NCC-FFP reviewed the compliance status of the forum’s decisions made in light of a previous meeting held on November 5, 2020.

It was informed that 14 foreign-funded projects, including those for power generation, transmission and distribution, amounting to $3.4 billion with the support of development partners, including the ADB, World Bank and Islamic Development Bank, were under implementation.

Bakhtiar lauded efforts of the Power Division for the removal of bottlenecks hampering the smooth implementation of foreign-funded projects in the energy sector, it added.

The minister highlighted that the government was focusing on energy sector reforms and energy efficiency through the production of renewable and clean energy at affordable prices, development of a reliable transmission system and an improved distribution network.

Energy Minister Omar Ayub Khan directed line departments of the Power Division to convey the course of action along with timelines for prompt dealing with the remaining issues and expedite implementation of energy sector projects.

He informed the forum that the Power Division was regularly monitoring the progress on foreign-funded projects. He said that these projects were critical for achieving the strategic objectives including the provision of affordable electricity, transmission efficiency and modernisation and enhancement of distribution system of the country.

Both ministers directed the relevant officials to expedite implementation of energy sector projects, which were imperative for sustainable economic growth of the country.

Published in The Express Tribune, February 26th, 2021.

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