Assistance: Rs201b is the amount ADB will provide for four coal-based plants. PHOTO: FILE
Upset about the rising power generation cost and an uncontrollable subsidy, the Pakistan Muslim League-Nawaz government has decided to launch four new schemes in its power generation policy that will see two furnace oil or gas-based plants shifting to coal and setting up of two new coal-fired plants.
The schemes, costing Rs252.23 billion, will receive the support and financial assistance from the Asian Development Bank (ADB), say budget documents for fiscal year 2013-14 unveiled on Wednesday.
The ADB will provide Rs77.6 billion, out of the total cost of Rs97 billion, for shifting furnace oil/gas-fired plants to coal. These include units 1-6 of Muzaffargarh thermal power station, which have power generation capacity of 1,350 megawatts (MW), and units 1-2 of Jamshoro thermal power station with 450MW capacity.
In the new budget, the government has allocated Rs2.7 billion for these two schemes.
Apart from these, the government is planning to set up two new coal-fired power plants each of 660MW capacity at a cost of Rs155.23 billion. For these plants, the ADB will give Rs124.1 billion.
Officials of the Ministry of Water and Power believe that if the coal-based plants come on stream the government will be able to save Rs100 billion in inter-corporate debt.
Earlier, the government of Pakistan Peoples Party, which completed its five-year tenure in mid-March, got engaged in a financing row with the ADB, which insisted on running some power plants on imported coal. However, the two sides ended the impasse later and agreed that 20% local and 80% imported coal would be consumed to run the power plants.
In the budget, the government has earmarked Rs169.16 billion for the power sector. Of this, the federal government will provide Rs51.44 billion, the National Transmission and Dispatch Company and Pakistan Electric Power Company will generate Rs86.24 billion from their own resources and Rs33.7 billion will be borrowed from foreign lenders.
An amount of Rs17 billion has been set aside for acquisition of land for 4,500MW Diamer Bhasha hydropower project and for construction of the dam’s Lot 1-5 Rs8.15 billion has been allocated.
For 4,320MW Dasu hydropower project, the government has allocated Rs1.74 billion. Donors including the World Bank are pressing Pakistan to shelve Bhasha Dam project and are offering funds for Dasu project.
Nandipur power project, with capacity of 425MW, will get Rs10 billion next year. The project cost has gone up to Rs57.38 billion against earlier estimates of Rs23 billion.
While presenting the budget, Finance Minister Ishaq Dar said the project cost went higher as machinery, which had been lying at the Karachi port for the last three years, could not be put to use.
Saying that the project would be completed in the next 18 months, he warned that action would be taken against the people involved in negligence.
The country is also working on Chashma 3 and 4 nuclear power plants with Chinese assistance. For next year, the government has earmarked Rs315 million for interconnection of these plants whereas total cost of the project is Rs3.15 billion.
Also, Rs50 million has been earmarked for conducting feasibility study on distribution of 100MW of electricity imported from Iran.
Published in The Express Tribune, June 13th, 2013.
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COMMENTS (19)
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@Sandip: good joke, we indians are masters of Chori and Seena Jori.....Kashmir is dusputed, you like it or not. Next we shall also say that Pakistan should get our NOC for Lahore and Karachi Project
@Asad Khan: For ur kind information India and Pakistan trade is about 2.5 billion dollars and via their countries it goes up to 6 billion than lets stop this trade as well,people like u are only responsible for this condition of pakistan.
@The Economist: from where india will give electricity? dont you know that we are also facing huge shortage in this area.come on dude. ...don't display wrong national pride. come and visit UP...BIHAR....PUNJAB ......ANDHRA. ..M.P. all major states and see the situation yourself before offering electricity to Pakistan. false pride could be dangerous.
@Farhan: its the quality of coal, its the avilbilty ..local coal cannot be avilable in next 5-10 years if current pace is maintained... threfore worldbank insisted that imported coal should be used. thar indeed has high sulphur content but that is not a major issue
@Farhan: There is plenty of coal in the world. If you can't find your own, you can import it. It is much cheaper alternative to producing energy from furnace oil, rental power or any such nonsensical schemes.
@The Economist: And you call yourself an economist. Do you have any other disastrous recipe in mind - producing power from furnace oil at exorbitant rates, rental power, import energy from your arch enemy. What next?
good joke.
Musharraf converted from fuel to gas and enjoyed 10 years now you are coming up with new idea from gas to coal to enjoy next 10 years then some one will up to convert from coal to solar energy..... why people of pakistan suffer..... make some viable option to have vision of 20 years instead of short term plans.....
Has Pakistan obtained the NOC from India for this dam? It's located on Indian territory illegally occupied by Pakistan.
Your current power plants are not running at capacity because you don't have the money to purchase fuel -- maybe you ought to fix that before you borrow money to build power plants which you won't have money to pay for the fuel.
There should be a combination of new power plants based on coal, new incentive policies on solar, wind & use of baggase etc;& strict monitoring on dues from consumers like govt & semi-govt depts, industries who hv illegal connections & line loss etc;all these measures should be adopted simultaneously if the govt has the will to do so.....
Thar Coal is the way out of this crisis !
circular debt is the mother of energy crises; working for cheaper alternate is a good sign.
I think at the moment Thar Coal is to be studied properly and if possible than bring out some power plants with there of good capacity and try to fulfill the needs of Sindh province from it.
local coal is not of good quality to produce electricti.majority of our cement sector is using imported coal to produce electricty.
Its not about power capacity. We already have enough power capacity. Trouble is Power plants have refused to operate unless their dues are cleared by WAPDA. Work on that instead of creating new power plants.
@Farhan Khan:
Local coal is not of good quality and processing it makes it expensive ....
@faran kahn Local coal in Thar is not of good quality and other coal resources need heavy investment for mining. We can not wait that long for electricity issue to be resolved
What abt importing electricity from india as it will be even more cheaper than importing it from iran as well as its 500 MW it can also be further increased.
Yes make the conversion to coal but why the insistence to use imported coal. Something doesn't look right. That does not make sense. You will still have an import bill. Alternative should have been to utilize as much of local coal production to save foreign exchange and to give a chance for the local coal production industry to take root (jobs for the locals). Should be a win-win situation.