The federal government is set to approve development projects worth Rs400 billion today (Tuesday), including granting permission to initiate work on converting 3,000 megawatt (MW), furnace oil-fired power plants to coal with an investment of Rs252 billion.
Headed by Planning Minister Ahsan Iqbal, the Central Development Working Party (CDWP) will meet here for the first time under the new government today. It will consider thirty schemes, including four concept clearance papers for the conversion of furnace oil and gas-based power plants to coal, according to the agenda of the meeting. Of the total Rs400 billion, the cost of power-related projects is Rs357.5 billion, which is 94% of the proposed cost of the thirty projects.
The CDWP is the second-highest body in charge of approving developmental projects. It clears mega schemes for final approval from the Executive Committee of the National Economic Council, which is chaired by Finance Minister Ishaq Dar.
The PML-N government has announced that it will alter the nation’s fuel mix over a period of three years, aimed at reducing the cost of electricity generation besides controlling the ballooning oil import bill. However, it is facing problems selling the idea of using indigenous coal resources for the purpose.
The Asian Development Bank, which is providing a loan for converting these plants into coal, is reluctant to allow the use of Thar coal for power generation. According to an official of the Ministry of Water and Power, there is a possibility that 80% of the coal used will have to be imported, while the rest will be mined from Thar.
The CDWP will consider a concept clearance paper for the approval of conversion of the 450MW furnace oil/gas-fired boilers to coal at units one and two of the thermal power plants at Jamshoro. The estimated cost of this project is Rs24.3 billion, including an Rs18.2 billion foreign loan component.
The concept clearance paper for another project – the installation of two new coal-fired power plants with a cumulative capacity of 1,200MW at Jamshoro with an estimated cost of Rs155.3 billion – will also be considered by the CDWP. Pakistan will obtain a loan of Rs116.3 billion for this project as well.
The conversion of a 1,350MW furnace oil/gas-fired power plant at Muzaffargarh, with an estimated cost of Rs72.7 billion, is also on the CDWP agenda.
The CDWP will also consider approval of the revised PC-I of the much-trumpeted but controversial 425-525MW Nandipur Combined Cycle Power Plant, which carries an estimated price tag of Rs57.4 billion.
The crippling energy crisis has forced provinces to setup their own power plants, and three provinces except Balochistan are expected to table projects before the CDWP for approval. The Khyber-Paktunkhwa government will table the 150MW Sharmai hydropower project, with an estimated cost of Rs33.4 billion, for the CDWP’s consideration. The Government of Punjab is also bringing five hydropower plants worth Rs12 billion to the meeting for formal approval. These plants have been planned to be set up at Chianwali, Pakpattan, Marala and Okara. To protect Muzaffargah from floods, the provincial government has also prepared a Rs11.5 billion project, which will be considered by the CDWP.
Published in The Express Tribune, July 2nd, 2013.
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