Aug 25 - 31, 2008

As the nation faces worse power crisis of recent times, the government has focused all its resources to exploring possibilities to create additional capacity and capability for generating electricity optimally, on an emergent basis. Punjab irrigation system can be effectively utilised to generate, in first phase, about 400 MW cheap electricity that could be made available within a short span of time. But due attention is not being paid to prioritise exploiting this substantial potential of renewable energy.

The Punjab Power Development Board was created as an arm of the Irrigation Department (now known as Irrigation and Power Department) for the promotion of hydropower generation in the province. As many as 591 potential sites at different river falls, canals and barrages, with medium and low head and high discharge, having a total capacity of more than 5,000 MW have been identified. Pre-feasibility studies for 35 raw-site projects of cumulative 350 MW capacity have been conducted. In addition, detailed feasibility reports of another 12 projects of about 50 MW total capacity are available since long. Yet, nothing physical has been done towards development of these small hydroelectric power projects in the province.

In fact, there were no sincere and concerted efforts made by the successive previous governments to promote construction of these power projects, either in public or in private sector. During the period 1995-1997 the provincial government had issued Letter of Interest (LIOs) to the private sector for setting up power stations at 22 identified sites. Not a single project could materialise. For many years the government did not re-launch the programme. Sometime in September 2005 the government formulated a revised power policy. This was however formally approved and announced only on 28th July 2006, as Punjab Power Generation Policy 2006. Two years thereon, the implementation of Policy has failed to achieve any physical progress on a single project.

The scope of Power Policy covers development of projects of capacity up to 50 MW, through public sector, private sector or under public-private sector partnership. In view of lack of interest exhibited by the private sector in the past to develop these projects, it was decided by the government to set up a few projects in public sector to serve as model or pilot projects. Ten project sites with confirmed technical feasibility and economic viability were thus earmarked for the purpose.

The Irrigation and Power Department launched, in September 2006, the first project namely Khokhra hydropower project on Upper Jhelum Canal, for which detailed feasibility study was conducted in August 2005. International tenders for the 3.20-MW project, to be located near Mandi Bahauddin at a total cost of Rs 260 million, were invited on turnkey basis. But no decision was taken on the bids received. After a lapse of almost a year, tenders were re-issued, this time only for turbines and other electromechanical equipment. Again, decision could not be made and tender has recently been scrapped.

Besides the projects to be developed by the government itself, there are 4 projects of cumulative capacity of 13 MW that are ready for take-off. These are 4.80 MW and 1.99 MW both on Lower Bari Doab Canal (Sahiwal district), 4.24 MW on Tail Mainline Upper Chenab Canal (Bambanwala-Sialkot) and 1.90 MW on Upper Gogera Branch (Mannawala- Sheikhupura). Bankable feasibility studies have already been prepared for these projects. Private sector has to be invited to develop these solicited projects on Build-Own-Operate-Transfer (BOOT) basis, project allocation being on minimum levelised tariff received through competitive bidding, in accordance with the provisions of the Policy.

However, pre-qualification for developing only one project has so far been invited by the Punjab Power Development Board. Pre-qualification documents from interested parties were received by 31st October 2007 for a 4.80 MW project on Lower Bari Doab Canal in district Sahiwal. There has been no further progress reported since then. According to project schedule specified in the Policy, bids were to be invited from selected parties within 100 days after submission of pre-qualification documents.

In addition, there are 35 sites identified as potential projects to develop hydropower stations of 160 MW cumulative capacity, on various canals located in Lahore, Faisalabad, Multan, Sargodha, DG Khan and Bahawalpur zones. These are classified as raw sites as detailed feasibility studies have not yet been undertaken and are to be conducted by the respective sponsors. There are another 10 projects, of cumulative capacity of 125 MW, proposed on various barrages on Chenab, Jhelum, Ravi and Sutlej rivers.

Seven private companies were allowed to develop projects at 11 raw sites. For the purpose as many LOIs were issued to them during October-December 2007, requiring the investors to prepare detailed feasibility study for the respective project within 12 months. Till to-date there is no progress made by any of the sponsors to commence requisite investigations for preparation of project feasibility report. It is obvious that preparation of the feasibility reports, and consequently construction of these projects, will be delayed inordinately, if at all the projects do materialise eventually.

The governments as well as sponsors are indifferent to the opportunity cost the nation has to pay heavily in case of long delays in implementation of these projects. It was in 1992 that WAPDA assessed the potential of power generation on the Punjab canals and barrages and, subsequently, completed feasibility studies at various sites. During the year 2003-04, WAPDA had received and evaluated bids from local contractors for construction and supply of machinery for a 3.30 MW Pakpattan hydropower project. Then the subject was transferred to the provincial government, putting spanner in the whole process.

To develop a hydropower project it is vitally important to conduct proper feasibility study. Realising the need for capacity building at Punjab Irrigation and Power Department to prepare feasibility studies, Asian Development Bank (ADB) had extended technical and financial support for the purpose in 2004. The 3-year capacity building project has completed last year. But it appears the project has failed to achieve its objectives, as feasibility studies of potential projects are not being undertaken departmentally. The department has recently asked for the Expression of Interest (EOIs) from consultants, as in the past, to prepare feasibility studies of another 5 projects proposed on canal falls, of cumulative capacity of over 34 MW. There has been no headway regarding appointment of consultants as yet, though the department received the EOIs in September 2007.

The development of hydropower is considered a key factor for future progress. Punjab government therefore needs to take stock of the situation, executing the identified projects speedily to meet its political agenda of improving the socio-economic conditions.

(Engr Hussain Ahmad Siddiqui is former Chairman of State Engineering Corporation, Ministry of Industries and Production, Government of Pakistan).