CDWP clears Power Park’s infrastructure development

China will provide debt to cover 85% of the project cost while the rest of the financing will be arranged by Pakistan.


Shahbaz Rana July 18, 2014

ISLAMABAD: A government agency on Thursday cleared a project for constructing infrastructure for the 6,600 megawatt Pakistan Power Park Project at Gadani at an estimated cost of Rs144.6 billion, paving the way for signing power purchase agreements with Chinese investors next month.

The project was approved by the Central Development Working Party (CDWP) – the body with a mandate to approve projects of up to Rs3 billion cost and recommend projects having a cost of over Rs3 billion to the Executive Committee of National Economic Council’s (Ecnec).

The go-ahead was given weeks before next month’s meeting of Energy Working Group, constituted under China-Pakistan Economic Corridor initiative. During the upcoming working group meetings Pakistan and China are expected to sign power purchase agreements.

China will provide debt to cover 85% of the project cost while the rest of the financing will be arranged by the government of Pakistan, according to a handout issued by the planning ministry.

The project aims at developing infrastructure facilities at Pakistan Power Park at Gadani for establishing 10 x 660 megawatt of imported coal fired power generation plants.

Under the project, a coal supply system, jetty head, cooling water facilities and several other installations will be built. The project was recommended for consideration of Ecnec.

Headed by Planning and Development Minister Ahsan Iqbal, the CDWP cleared six projects costing Rs177.4 billion in total, including foreign exchange component of Rs126.6 billion.

It also sanctioned Greater Karachi Water Supply Scheme K-IV (Sindh), Kala Dhaka Area Development Project (Khyber-Pakhtunkhwa), Khyber Area Development Project (Khyber-Pakhtunkhwa), Construction of 50-bed hospital Including hostels and other equipment at Pasni (Balochistan) and Red Chilies Processing Centre (Sindh).

While discussing the Greater Karachi Water Supply Scheme (K-IV) (Phase-I), the planning minister said financial share of the federal government in the project has been raised from one-third to half in compliance with the prime minister’s commitment during his recent visit to Karachi.

Referring to a recent statement by former president Asif Ali Zardari, the minister said some people accused the federal government of interfering in provincial matters. “But the federal government interferes in a positive manner like this project,” he added.

The CDWP sought assurance from the provincial authorities regarding availability of water in the project and directed the authorities to provide clean drinking water to the people of Karachi on an urgent basis. The minister expressed his reservation over the waste management system in Karachi. He said that the solid waste of Karachi was dumped into sea which was creating many environment and health hazards for people.

The forum approved the project subject to the condition that cost escalation in the project in any case will be borne by the provincial government. Iqbal also stressed upon the authorities to use funds in an efficient manner and ensure transparency at all stages.

The conditionally approved Kala Dhaka Area Development Project is to cost Rs1.7 billion while Khyber Area Development Project will cost up to Rs1.3 billion.

The project is aimed at supporting rural transformation and promotion of legitimate agricultural activities and enhancement of mobility through construction of roads in select areas of Khyber-Pakhtunkhwa.

The CDWP also approved construction of a 50-bed hospital in Pasni area of Balochistan at a cost of Rs441 million and Red Chilies Processing Centre (RCPC) project of Industries and Production Division costing Rs244.7 million.

The project had been deferred during the PPP government after criticism of using sacred resources for the processing centre. The CDWP also approved the Rs1.5 billion Balochistan Nutrition Programme for Mothers and Children.

Published in The Express Tribune, July 18th, 2014.

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