Oct 24 - 30, 20

With a major part of Pak-China economic cooperation focusing on energy development, Pakistan envisions a Chinese investment of more than US$11 billion in the energy sector during the next five years.

Chinese enterprises have undertaken numerous projects in Pakistan in hydropower, thermal, nuclear and alternate energy sectors. The Mangla dam rising, Kohala dam, Neelum Jhelum dam, the Nandipur and the Chichokimalian thermal power projects are some of the important projects being undertaken by the Chinese enterprises in Pakistan. A number of big hydro, coal, and alternate energy worth billions of dollars are also in the pipeline. Pakistan China Joint Energy Working Group (JEWG) had already been formed to identify projects in energy sector. Chinese firms are also working on 15 power projects in Gilgit-Baltistan and Azad Kashmir.

Since 1994, under PPIB's aegis, the energy generation capacity of the private sector has increased to more than 8000 megawatts. PPIB has even more ambitious plans for the future and expects to add an additional 8000 megawatts in the next 5-6 years.

The government of Pakistan has asked PPIB to outsource management, operation, maintenance (O&M) and up gradation of nine public sector thermal power plants, with an installed capacity of around 4500 megawatts, to the private sector. These plants are currently producing only 1400 to 2000 megawatts of electricity.

Official sources claimed that resource constraint is one of the major impediments in overcoming energy crises. As per the documents, total of receivables and payables of the Pakistan State Oil's (PSO) have reached Rs307.5 billion. Out of this, Rs155.5 billion are receivables and Rs152 billion are payables.

According to the documents, the PSO's receivables include Rs31.5 billion from the water and power development authority (Wapda), Rs66.5 billion from the Hub power company (Hubco), Rs33.5 billion from Kot addu power company (Kapco), Rs2.3 billion from Pakistan international airline (PIA), Rs299 million from the oil and gas development company (OGDC), Rs5.7 billion from Karachi electric supply company (KESC), and Rs1.15 billion from Pakistan railways.

The PSO is to receive Rs1.4 billion on account of audited price differential claim of high speed diesel (HSD), Rs3.4 billion on account of price differential on low sulphur fuel oil and high sulphur fuel oil (LSFO/HSFO), Rs1.36 billion on account of price differential on imported PMG and Rs7.6 billion price differential under GLMP.

According to the document, the power sector owes PSO an aggregate amount of approximately Rs137 billion, of which Hubco owes PSO Rs66.5 billion, Kapco Rs33.5 billion, and Wapda Rs31.5 billion.

KESC owes Rs5.7 billion. PSO's total payables to local refineries touched Rs69 billion on October 19, of which Rs31 billion are owed to Pak-Arab Refinery (Parco), Rs8.5 billion to Pakistan Refinery (PRL), Rs9.43 billion to National Refinery (NRL), Rs16.91 billion to Attock oil refinery (ARL), Rs2.8 billion to Bosicor and Rs362 million to others.

If LC payment of Rs83.057 billion is included, total liabilities of the company are in excess of Rs152 billion. The huge outstanding is adversely affecting PSOís liquidity and it may lead to inevitable breakdown in the supply chain, resulting in fuel shortages in the country, which would lead PSO to default, an official said, adding: "The PSO is supplying an average Rs32 billion worth of fuel to the power sector on monthly basis."

Official sources told Page that the present government has started a number of new projects, for power generation and irrigation purposes, which are under construction to resolve the power and water shortage in the country.

Out of these projects, Prime Minister Syed Yousuf Raza Gilani laid the foundation stone for the construction work on the country's first ever largest multi-purpose Diamer Bhasha Dam, which is the first ever major hydropower project after Mangla Dam built in 1967 and Tarbela Dam built in 1974.

According to them, the Diamer Bhasha dam with a height of 272 meters will be built on Indus river, about 300 kilometers upstream of Tarbela Dam. Diamer Bhasha Dam will have the capacity to produce 4,500 MW of electricity and store 8.1 million acre feet of water and will be completed in eight years at an estimated cost of 12 billion dollars.

This dam will generate electricity worth about two billion dollars per year and recover its cost in about seven years. It will be the highest roller compacted concrete (RCC) dam in the world.

It may be noted that the Diamer Bhasha Dam project was approved by the council of common interest on 18 July 2010 and the government initially provided Rs5 billion for land acquisition to the government of Gilgit Baltistan and Khyber Pakhtunkhwa.

Another Rs18 billion will also be provided this year in this regard so that the construction work could be going on without any hurdle. Mangla Dam Raising Project in AJK will provide additional water storage of 2.88 million acre feet (MAF) of additional water storage and 644 Gwh of additional hydel generation. The other project is Gomal Zam Dam in Fata and KPK with storage of 1.14 MAF and power generation of 17 MW. Another project Khan Khwar in KPK will generate 72 MW of electricity while another project being completed this year is Allai Khwar in KPK that will generate 121 MW electricity. Other important project being completed during 2011-12 by the present government is the first phase of Command Area of Greater Thal Canal in the Punjab that will provide water for irrigation to 350,000 acre of land.

Another important project, in Gilgit Baltistan being completed this year is Satpara Dam that will store 0.093 MAF of water and produce 17 MW of electricity.

Jinnah Dam project with 96 MW of power generation in the Punjab and Buner Khwar in KPK to generate 130 MW of power generation will also be completed during 2011-12.

Some other ten important projects for power generation are under construction and will be completed within next few years. These projects are: Neelam Jhelum (AJK) with power generation of 969 MW, Tarbela 4th Extension in KPK for power generation of 1410 MW, Golden Gol in KPK for power generation of 106 MW, Jabban Power House in KPK for generation of 22 MW, Kachi Canal in Balochistan for irrigation of 713,000 acres of land and Rainee Canal in Sindh for irrigation of 412,000 acres of land. Other small and medium dam projects under construction are Darwar, Nai Gaj, Naulong and Ghabir.

What is needed is to adopt short-term and long-term planning to overcome power shortages, which are hitting hard to the trade, industry, and public.