Govt wakes up to CPEC power projects delays

Sets one-month deadline for Power Division to devise a policy to deal with the problem

Shahbaz Rana August 03, 2021


The government has set a one-month deadline for the Power Division to devise a policy to deal with the problem of a delay in start of commercial operations by five China Pakistan Economic Corridor (CPEC) power projects having 3,600 megawatts (MW) generation capacity.

The projects are falling far behind their dates of commissioning (CODs) agreed between the government of Pakistan and the Chinese investors due to overall slowdown of the work on the CPEC projects, Covid-19 related delays and strikes at some projects.

The Pak-China Relations Steering Committee took this decision on Monday in addition to giving a oneweek deadline to the National Electric Power Regulatory Authority (Nepra) to decide the tariff petition for the Lahore-Matiari Transmission Line — another critical CPEC project falling behind schedule by years.

“While discussing CPEC energy projects facing delays owing to Covid-19 pandemic, the committee directed the Power Division to formulate a policy to deal with COD extensions issues of the power projects,” read a handout issued by the Ministry of Planning after the committee meeting.

The committee chairman, Minister for Planning Asad Umar, directed the Power Division to formulate a policy by the end of August 2021, a senior official told The Express Tribune. In the past, bureaucracy has ignored such warnings, including a threat to take their cases to the prime minister for strict action. The cumulative generation capacity of these five projects is 3,584MW.

In case of a delay by the power producers, the project sponsors are usually under threat of paying penalties. However, some of the delay was caused due to the government’s policy decisions, said the sources.

These five power sector projects — 884MW Suki Kinari hydropower project, 720MW Karot hydropower project, 330MW Thar Block-II, 330MW ThalNova Thar block-II and 1,320MW Thar block-I — were falling behind scheduled commissioning dates and needed relaxations.

Read China vows high quality construction of CPEC

The Suki Kinari project is facing at least 10 months delay; Karot project four months delay, 330MW Tel Thar project one year delay, Thal Nova project 15 months delay and 1,320 MW Thar Block-I project is facing at least one year delay.

The sources said a delay in giving formal extensions to these projects could cause troubles from their lending banks. The committee also directed the Khyber Pakhtunkhwa government to complete the registration of the Security Trust of the Suki Kinari project in the next 10 days.

The project also faces additional equipment installation issues for transmitting electricity. The committee asked the Power Division to finalize the need of the Shunt Reactor by the end of August 2021. In case of the decision to install the Shunt Reactor, the Power Division then will propose a plan to compensate for the change in scope.

The committee directed the Power Division to ensure the availability of sufficient power for the operationalization of the 660 KV HVDC Matari Lahore Transmission Line from September 1. Nepra has also been asked to finalize tariffs for the project during the testing stage.

The National Transmission and Dispatch Company (NTDC) was asked to address the right of way to make sure 4000 MW is available for evacuation by September. The government also wanted to build ThakotRaikot road project on a government-to-government basis but it requires a formal decision, which remains pending.

The steering committee decided that “Ministry of Communication will move a summary for governmentto-government framework agreement on the project with China next week for the cabinet approval”.

Similarly, the National Highway Authority (NHA) will request the Attorney General Office immediately, and through the AG Office it will request the court to conduct early hearing and make a decision about the stay order that was affecting work on three sections of the Zhob-Quetta road project.

Read more Pakistan rejects Indian minister’s CPEC claim

Prime Minister Imran Khan has set up the Pak-China Relations Steering Committee to revive economic ties with China that remained on the backburner during his government’s first three years. The supra body will also work to build the positive narrative of China-Pakistan relations, underscoring the government’s renewed focus on the multibillion dollar initiative.

The steering committee also took up the issue of a delay in finalization of a developer for the Dhabeji Special Economic Zone (SEZ). The Request for Proposal for selection of developer for Dhabeji SEZ had been launched in 2019 but developer could not be finalized.

It was decided that Asad Umar will take up the issue with the Sindh government to expedite the developer selection process. The Faisalabad SEZ was also facing delays due to procedural hiccups on part of the Punjab government.

For provision of gas, electricity and water to Gwadar City, it was decided that the Chinese operator, the CoPHCL, will submit the marketing plan for Gwadar Port and Free Zone in the next meeting which will ascertain the total prospective requirements vis a vis timeline of utilities at the Free Zone.

The meeting was informed of prospective investments in the LNG at Gwadar. Umar directed the Ministry of Petroleum to help facilitate investors and coordinate with relevant ministries including the Ministry of Maritime Affairs to resolve the investors’ issues on priority.


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