The project was conditionally cleared by the Executive Committee of National Economic Council (ECNEC) – the highest project approval authority, with directions to address the concerns of concerned government agencies.
The ECNEC approved it a day after the Central Development Working Party (CDWP) cleared the mega scheme for final approval of the highest body.
The project aims at developing infrastructure facilities at the Pakistan Power Park at Gadani for establishing 10, 660MW 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.
While approving the project in principle, the chairman of ECNEC -- Finance Minister Ishaq Dar -- directed the secretary of planning and development to further rationalise the cost of the project, according to a handout issued by the Ministry of Finance.
Dar emphasised that it was the responsibility of the Planning and Development Ministry to make sure that the calculations should be factual and remain the same till completion, it added.
Ministry of Planning concerns
While the CDWP had cleared the project for ECNEC consideration, the Ministry of Planning recorded its objections against the project.
The biggest objection was that the Rs146.6 billion cost was not based on any detailed feasibility study, according to an official of the planning ministry. He said the cost was worked on the basis of rough estimates.
Secondly, the ministry also objected the plan of awarding the project’s Engineering, Procurement and Construction (EPC) contract on a single party basis. It has advised the government to follow the competitive rules, he added.
Sources said the Chinese were pushing Pakistan to award the contracts of the projects initiated under the China-Pakistan Economic Corridor (CPEC) initiative to Chinese investors on a single party basis.
Under the CPEC China wants to secure energy and transportation lines through Pakistan for the western part of China. In return, Islamabad is seeking Chinese assistance for some mega projects.
Thirdly, said the official, there were also faults with the design, as it lacked the complete value chain. The official said the focus of the Ministry of Water and Power, the sponsoring agency, was on the import of coal and power generation.
The official said Sindh and Balochistan showed concerns over heavy reliance on imported coal to generate electricity at Gaddani Power Park.
China will provide debt to cover 85% of the project cost, but so far no loan agreement has been signed, said the official. The Ministry of Water and Power was also clueless about the cost of the loan, he added.
The ECNEC chairman has asked the Ministry of Water and Power to address all concerns raised by the Ministry of Planning.
The major scope of project includes marine works -- including two breakwaters, each measuring 3.5 kilometres and 1100 metre long jetties and berths for receiving ships the size of 40,000 DWT to 210,000 DWT, which also includes a floating jetty for anchoring small boats and tug boats, provision of cooling water facilities and other related infrastructure, according to the Ministry of Finance handout. It added that the project will be completed in three-and-a-half years.
The ECNEC also approved phase-I of the Greater Karachi Water Supply scheme at a total cost of Rs25.5 billion. Half of the cost will be borne by the federal government.
The project has been designed with a total capacity of 650 million gallons per day (MGD) to meet the water demand of the 18.5 million inhabitants of Karachi. The present water demand in Karachi is approximately 1000 MGD, whereas the total existing supply is 650 MGD, resulting in a shortfall of 350 MGD. The project will be completed in four years.
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@Jamshed It is 660 MW written out in report. The 6600 figure appears to be a typo but not by PMLN but the reporting agency. Re read it up again and you will see both figures.
@asim: Where do you get this idea completing plant in one year. I was in power plant design for 18 years in USA. This is impossible. Please check your facts before making statements.
@abdulrauf akhtar: Who wants to risk sanctions with Iran? Even the Japanese are afraid of US sanctions. US will slap sanctions on Pakistan right away if Pak deals with them in a gas deal. The world knows Iran's economy is collapsing which is why all Iranians want to run away as refugees. At least current government is working to fix energy crisis so fast when previous government and dictator did nothing in 15 years.
@asim: How many years ur leader took to build one hospital? It takes more than a year to build 1kanal house and u r talking about building a coal power plant in one year
Another Typo. Either project is 660mw not 6,600MW or the cost is Rs. 1466b not Rs.146b. Cost of coal powered plant is Approx $2m/MW. a 500mw plant would cost more than 1b$ or Rs. 100b. Wonder When will PMLN start telling truth.
@asim You really need to check your facts before opening mouth. The coal plants are quickly set up relatively to other projects, that much is true! But how will you pay for these. I am not sure if you have any understanding of finances and economics but to pay for these mega projects, you need to have your financial house in order. No bank just hand out money with out some asset backing. That is exactly how these things are now being financed by getting the debt servicing in order, sale of assets and accumulation of Forex to double.
Yes Nawaz has not completed any COAL plan in one year but care to question why in last 15 years no one has done it either. At least this government is getting things moving on the ground.
Shameless criticism for sake of criticism will destroy our society.
@abdulrauf Iranian gas will also come, international sanctions are not easy to tackle. Coal plants are not a "waste:" as they produce cheapest baseload power.
Coal fired plants can be operational within a year but impotent, corrupt, dishonest Nawaz has not done anything even after one year
WHY WE CAN'T HAVE IRANIAN GAS ? WE ARE SPENDING BILLION'S JUST TO WAIST IT WILL INCREASE THE COST UNBEARABLY .
Another big blow on 'orderlies' and their corrupt sahibs.
This is Nawaz Sharif this is inqilab this is Rohan Pakistan.This is a blow on fake inqilabis who want to deprive people of this country a prosperous future.They are definitely big losers-Their fate is sealed.