ISLAMABAD:
In a major development, Pakistan and Tajikistan have cleared a key hurdle as they have reached an understanding on the price of electricity to be supplied by the latter under the Central Asia-South Asia (CASA) 1,000 project, officials say.
The project, aimed at easing energy shortages in Pakistan and utilising surplus power in Tajikistan, has the backing of the United States and World Bank, which has approved millions of dollars in financing to execute the programme.
Pakistan has been facing an energy crisis, which has disturbed normal and business life and erased 3% off economic growth every year. Aware of the gravity of the situation, the present government has pledged to tackle the shortages but it believes power outages will not end before 2018.
According to officials, Pakistan and Tajikistan have settled the tariff issue, which will lead to signing of a power purchase agreement. Earlier, Tajikistan sought 3.5 cents per unit, but later increased the price to seven cents.
“Now, the two sides have agreed on five cents per unit for the supply of electricity,” a diplomatic source told The Express Tribune.
However, officials pointed out that despite finalising the tariff, a major challenge still stood in the way of the project as power transmission lines would have to pass through war-torn Afghanistan.
According to experts, the US is playing a lead role in striking the power supply deal between Pakistan and Tajikistan. It has also pushed Pakistan to press on with the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project. But both power transmission lines and the gas pipeline will snake through Afghanistan.
Pakistan and Afghanistan have determined the transit fee for gas supply from Turkmenistan, but they have yet to decide on the fee for power transmission.
According to officials, Kabul is seeking two cents per unit, a high price that threatens to make power purchase unfeasible for Pakistan.
Some officials of the Ministry of Water and Power suggest that Islamabad and Kabul should enter into a bilateral arrangement and the latter should waive the transit fee.
“Afghanistan should not demand the fee as Pakistan is treating power supply as a transit trade arrangement,” an official remarked.
He pointed to the fact that Pakistan had been providing a supply route for Nato forces in Afghanistan on a nominal fee and Kabul was also enjoying free flow of goods through Pakistan under a transit trade accord.
Others were of the view that the fee, if necessary, should not be more than Rs0.10 per unit.
Assistance
The World Bank has approved CASA-1000 project, offering $120 million, out of a total loan of $552 million, for laying transmission lines in Pakistan.
Total cost of the project is estimated at $1.16 billion and remaining funds will be provided by the Islamic Development Bank and other donors.
Under the project, the Kyrgyz Republic and Tajikistan will export 1,300 megawatts of electricity to Pakistan and Afghanistan. A major chunk of supplies will come to Pakistan and about 300MW will go to Afghanistan.
Feasibility
According to the Tajikistan embassy in Pakistan, Tajikistan after being disconnected from Central Asia’s energy grid has no other option but to sell surplus electricity in summer to South Asian countries.
It will also help build close economic ties with Kyrgyzstan, Afghanistan and Pakistan. “It will help Afghanistan demonstrate its viability as a transit country linking the two regions,” the embassy said.
It said Canadian company SNC Lavalin, which has conducted the feasibility study, endorsed the viability of CASA-1000 based on the current and projected volume of spillover water of hydropower plants in Tajikistan in the May-September period.
Published in The Express Tribune, June 24th, 2014.
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COMMENTS (17)
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@Parvez: "Easy" is not the goal here but some money making contracts for "friends".
This 1000 megawatts could easily have been generated under the small dam run-of-the-river project that was to be mostly locally funded..........the big problem there was that there was not sufficient ' kick back ' involved and the project was allowed to die. Good governance...anyone.
Our leaders are sane and always go for building castle in air. They are in habit of fooling nation from last 65-70 years. UK build Pembroke Power station in just 4 years at the cost of £800 million ($ 1.4 Bn) with capacity of 2160 MW with efficiency of 60%. http://en.wikipedia.org/wiki/PembrokePowerStation
So we are going for 1000 MW for the cost of 1000 MW and paying tax money to IMF and Turkmenistan. Is it a wise decision. They always do where there is quick kick back and it is against Pakistan Interest. Some of smaller dams and run of river (RoR) projects can be completed in medium term (3-5) years with that kind of money but we will always find a way out which will further add to our problem rather providing any relief to general public.
Unless there is visionary and honest leader gets into power corridor, I don't see a relief or improvement in energy crisis for Pakistan.
This should have dine 5 years back, anyways better late then never. Wish for the success for this project 1000 megawatts will be much beneficial in these acute energy crisis times.
@iFear: We are buying more costly, but less reliable electricity from India, already.
No, you are not buying any electricity from India right now.
Where is the paper work of any deal / contract / negotiations regarding this project with AFGHANS?? After all it has to be build via Afghanistan.
Anyway we are still waiting for the paper work of peace talk, LNG, India visit, budget, tax net, sacking of NADRA and Reserve Bank Directors, PCB Chairman, Karachi Airport attack, PAT massacre, and 2013 Election RIGGING.
Jeo PMLN Jeo!!! You deserve to sell this poor NATION interests on very cheap price in fact on no price!!
U.S want to give Afghans leverage over pakistan.i.e What Russia enjoys over Ukraine's Gas Supply. Balochistan is already recieving 70 MW of electricity from Iran So why not to buy more electricity from Iran.. Basic infracture is already inplace. what required is Upgradation. Sadly we never exercised our Leverage on Afghan transit trade but Afghans will exercise it in first place. Afghan wants to avoid pakistani road link with indian help. Chabahar-Zabol-Nimroze-Kabul highway is functioning fully while a Rail route is also going to get ready by 2015, all by Indian investment.. Chabahar was main competator to Gawadar & now it taken the lead as prime route for Cebtral Asian nations. But Our Establishment is cheerful in leasing Gawadar to China..
The time period of this project is very long and Pakistan can easily build coal power plants; No need to waste money
This may be like Iran-Pakistan gas pipeline, never to materialized
Karachites are paying Rs. 12 to 15 per unit (depending on no. of units utilized) This is loot !!
@Chachoo: What are you talking about sir? Pak never touches border with any of the Past Russian Republics except thru Afgh. Another route could be from Tajikistan to China then enter Chitral Valley from north.
It's not so bad a deal after all. We are buying more costly, but less reliable electricity from India, already. Hopefully India don't brief Afgh to throw something into this deal to sabotage or make it less convenient than the more expansive electricity it sell to us.
I appreciate the government for making this deal. We need cheap electricity and this deal seems to provide us just that.
@Chachoo: You must be a genius for noticing something that no one else did.
Firstly, Pakistan has no land border with Tajikistan. At the closest point while they are only 17 km apart, there is still Afghanistan in between.
Secondly, the route shown in your map follows natural river valleys and traditional highways and is the easiest to implement. What you are instead suggesting is to take the power lines up to the Pamir mountains to a height of 7,000+ meters, almost as high as the Himalayas, and bring it down from there.
It appears that Pakistan has once again put the cart before the horse. Rather than involving the Afghans in a partnership and understanding the level of investment that would be required to install power lines and transmission equipment, Pakistan has gone ahead and decided on power tariff when there is no infrastructure in place right now.
Could somebody explain the stupidity of the Nawaz government that when the Route from Tajikistan is available then why they want to use Alternative Afghan route?. America wants to trap Pakistan and Nawaz governement is falling prey to it. Just see the map yourself. Why Tajikistan is not used as a major transit artery. Why America is forcing Pakistan to lay the main line through Afghanistan. ?. I think PMLN is not a group of 2 year old kids that they are not understanding what is going on.
Here is the map. Decide on your own what is feasible for Pakistan. Route through Tajikistan or route through main Afghanistan? http://www.casa-1000.org/MAP.jpg
"However, officials pointed out that despite finalising the tariff, a major challenge still stood in the way of the project as power transmission lines would have to pass through war-torn Afghanistan."
Deal is as good as above statement. American guarantee means nothing in today's real world politics. This is only possible if you have a friendly Afghanistan and that will be possible if you stop interfering in their internal affairs.
what a useless waste... pakistan could have easily built 8-10 coal plants producing 500-800 mw each in last 5 years. but they always find a hard way to do things