July 13 - 19, 2009

Balochistan is presently facing frequent and unannounced electricity load shedding. The situation is getting worse for the local traders and businessmen, as business activity slows down with the rise in temperature during summer. The neighboring Iran can help the country to meet its power requirements at least for Balochistan. The coastal areas of the province have largely been dependent on Iran for electricity requirements. Iran is already supplying electricity through its 132KV line to Mekran, whose requirement is estimated at 17.5MW. The Pasni powerhouse, with a generating capacity of 40 megawatts, could not meet the power requirements of entire coastal region, as its generators incurred faults. Four years back, the Quetta Electric Supply Company (QESCO) constructed the power transmission lines in Mekran at a cost of Rs138 million and finally connected it with Iranian grid system. It saved around Rs700 million that it had previously been spending to operate the gas turbine for power generation.

As a part of government's long-term power strategy, a grid station is under construction in Gwadar. Moreover, 132 KV transmission line from Pasni/Turbat is being extended to Gwadar at a cost of Rs360 million. Eventually, Gwadar will be linked to the national grid as soon as the demand grows for power consumption. The Oman government had given a grant of $100 million to be paid in five years, out of which, electricity generators for the Gwadar port have already arrived. Presently, 35MW power is being imported from Iran through Mand interconnection on 132 KV, Tuftan 2MW on 20KV and Mashkehl 2MW on 20KV.

In 2007, Pakistan signed an agreement with Iranian company Tavanir under which Pakistan will buy 100-megawatt power from Iran for Gwadar deep-sea port in Balochistan. Under the deal, Iran will supply100-megawatt power to Gwadar port from January 2009 through a 170km long 220 KV double circuit transmission line between 220 KV Polan sub station at Iran side and 220 KV Gwadar sub-station. A 100km long line will be constructed in Pakistan and remaining 70km in Iran. The total cost of the project has been estimated at US$86 million, out of which $26 million will be borne by M/s Tavanir and is included in the tariff, which is 6.25 cent, applicable from December 31, 2008, whereas the remaining $60 million will be borne by Pakistan. The tariff for one year has been fixed at 6.25 cent per unit and it will be reviewed after one year. The import of power can be enhanced up to around 400 MW to meet the future requirement of Gwadar as well as the coastal areas of Balochistan.

The Iranian government had been asked to help meet necessary electricity and gas requirements of District Gwadar, which includes Gwadar, Pasni, Ormara and Jiwani. Iran has tentatively agreed to meet the energy requirements of Balochistan province. The Gwadar port authorities had reportedly asked the federal government to manage gas and electricity requirements especially for the proposed hotels, restaurants, gas stations, and other development projects in the area.

Gwadar port has yet to take-off for lack of supportive road links to transport cargo up-country. By executing the strategic projects like national trade corridor (NTC), giant shipyard at Gwadar, Pakistan can appear on the world map of ship building, repair and deep sea container handling in next five years time. $5.36 billion NTC project is mainly aimed at decreasing the cost of doing business through improved trade logistics and connectivity. As compared to Karachi and Port Qasim, which operate on a royalty basis, the selection of the port operator for Gwadar was on the basis of a gross-revenue-sharing formula. Hence the operator will have to set up three different companies to look after various activities at the Gwadar port, including cargo operation, marine operation and the free economic zone. The port is expected to work as the main transshipment port for cargoes destined for Dubai and Karachi Port. Mother vessels from US, Europe and the Far East will discharge cargoes destined for Dubai and Karachi at the Gwadar Port for onward dispatch through feeder vessels. This would save time and cost for ships coming to the area.

Gwadar needs enough electricity to meet the demands of its future commercial and industrial estates. With the development of Gwadar port, the hotel industry will grow at a faster pace providing residential and recreational facilities to the foreign tourists, business tycoons and representatives of the Multinational firms and companies in Gwadar. The future demand for electricity in Gwadar will be higher and may increase, according to an estimate, from 14MW in the year 2010 to 74 MW in 2030 and 370 MW in 2050.

The future port city of Gwadar will have power supply from the Pasni Power House, the Panjgur Power Plant and Iran. As a long- term strategy, a grid station is being constructed in Gwadar. Moreover, 132 KV transmission line from Pasni/Turbat is being extended to Gwadar at a cost of Rs.360 million. Eventually, Gwadar will be linked to the national grid as soon as the demand grows for power consumption. The Pasni power house was supposed to cater to the power needs of entire Mekran region. It had the capacity of generating 40 megawatts, but its generators incurred faults and were in dire need of repair. The government rehabilitated the Pasni Power House ensuring power supply to some parts of Mekran. The QESCO also plans to take the power transmission line from Pasni Power House to Gwadar.

Last year, Islamabad and Tehran agreed to expedite the process of importing electricity from Iran to Pakistan. As a result of a decision taken during a meeting of Iran's Ambassador to Pakistan Mashaallah Shakeri with Minister for Water and Power Raja Pervez Ashraf last year, a transmission line for importing 100MW of electricity from Iran for Gwadar was launched during the visit of the Iranian minister for energy. Pakistan has also signed a memorandum of understanding to purchase 1,000MW from Iran.

Tehran has also offered to invest in power projects particularly in hydropower plants and upgrade the country's transmission lines system on low cost. Balochistan coast has tremendous potential in offshore exploration in oil & gas sector, which is yet to be exploited. If offshore drilling were successful, it would give a tremendous boost to Gwadar development, as it would meet entire energy requirements not only of Gwadar but also of Pasni, Turbat and adjoining areas.