UPCOMING POWER NEEDS
By ASHRAF KHAN
May 09 - 15, 2005
In 1994, the then government of Benazir Bhutto invited much criticism over its power policy, which liberally allowed private investors, mostly from abroad. The exorbitant power tariff offered to the investors with a guaranteed buy-back led to a glut of project proposals and as much as 34 proposals were splashing on the official tables offering a cumulative capacity of over 7200 mw as against the required 3000 mw. It may have been the costliest investment but at the same time it pushed back the looming shortage of power in the country. It was a compulsive need to have set up those plants to cater for the electricity needs of the industry, which otherwise would face a disaster.
The same scenario is seemingly brewing up again as the planners instead of capitalizing the available time are still bickering over the undefined priorities. Sources said that there is a clear rift between the Ministry of Water and Power and Private Power Infrastructure Board (PPIB). The ministry is desperate to wooing foreign investment to meet the power deficit regardless to the already laid out power policy, which emphases on hydel power projects and coal-fired power plants follow being the cheapest options. The PPIB, a one-window facility for investors, is serious to adhere with the policy, though such kind of projects need longer gestation period. On the other hand, the ministry is holding road shows in the Middle East and US to attract any kind of project. The difference of priorities pose a serious setback to the upcoming power needs, which is feared to create yet another power saga in the country.
PROJECT OFFERING BEGINS
A plan to install private power projects of around 7,500 MW, with investment of around $8 billion (in the next 8-10 years has been chalked out by the Private Power and Infrastructure Board (PPIB) and the Ministry of Water and Power to combat the looming power shortages in the country. In a summary prepared for the 52nd meeting of the PPIB it has been pointed out that in the road shows investment opportunities for hydel, thermal, gas and coal projects for power generation were highlighted.
PPIB on behalf of the Government of Pakistan, had arranged two road shows — one in Dubai on February 20-21, and the other in London on March 2-3 to solicit investment for power generation projects in Pakistan.
The Brazil Energy, General Electric, Al-Ghorair Group, Marubeni and other well-known players showed interest to participate in the projects. In addition, AES (USA) also showed interest to develop and implement 1,000 MW project based on Thar coal, which would bring in an investment of over $1 billion. The President of Blobeleq (UK) had announced that his company had strong investment focus on Pakistan and it would invest $1 billion in Pakistan's power sector.
The summary also referred to the appointment of advisers for three international competitive bidding (ICB) projects. Private power and Infrastructure Board intends to carry out ICBs for three projects i.e. 400-500 MW 'Uch-II' project at Guddu based on BTU gas from Uch gas field in Balochistan, 450 MW 'dual-fuel' project near Faisalabad, and a 350 MW 'dual-fuel' project near Lahore.
These projects require investment of around $1.3 billion from the private sector.
Expressions of Interest (EoI) were received from 23 different companies and complete proposals from only six companies. The last Board meeting had instructed that matter relating to appointment of advisers and financing costs would be taken up with the World Bank. The World Bank financing in short-term can be made available only for hiring individual experts and not for the firms.
PPIB is now inviting bids from the pre-qualified private firms/consortiums for developing the following three independent private power projects worth about one billion dollars.
PROJECT AT UCH (UCH-II)
The project will be located near Wapda's existing power station at Guddu, Sindh. Using low BTU gas from Uch gas field, available for 25 years, the project will be based on combined cycle technology. The gas requirement for the project is 160-180 MMCFD and the cooling water requirement is 270-300 cusecs, which is available. National transmission and despatch company (NTDC) will be the power purchaser while oil and gas development company limited (OGDCL) will supply the gas.
PROJECT AT FAISALABAD
The project will be located very close to the Wapda's power station at Faisalabad, exactly at the load centre. Its proposed fuel is dual fuel, i.e. pipeline quality gas and oil. The project will use combined cycle technology and its gas requirements will be 90 MMCFD. NTDC and Faisalabad electric supply company (Fesco) will be power purchasers while Sui northern gas pipeline limited (SNGPL) will be the gas supplier.
DUAL FUEL PROJECT NEAR LAHORE
The project will be located at Chickoki Malian near Lahore, and based on combined cycle technology. It will use pipeline quality gas/oil as fuel. The gas requirements of the project will be 70 MMCFD. NTDC and Lahore electric supply company (Lesco) will be the power purchasers, while SNGPL will supply gas to the project.
The invitation for proposals has been advertised through national and international press and the last date for submission of proposals is June 20, 2005.