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Pakistan-China nuclear deal.

A brief official press release issued late last month in Islamabad said that Pakistan Atomic Energy Commission (PAEC) and China Nuclear Corporation (CNC) had signed contracts relating to the 300 megawatt nuclear power plant that Pakistan had agreed to buy from China and is being set up at Chashma near Mianwali. Instead of giving details about the project the press release contained platitudes expressed by both sides and merely stated that the Chinese delegation visited Pinstech and "held indepth discussions" with Dr. Ishaq Ahmed Chairman PAEC and other senior officials of the Commission.

The sketchy press release may have answered a question but raised many. What is the cost, the time schedule for completion, whether turn-key or it has indigenous component and if so how much? These are the questions which have not been answered. Such questions are pertinent and cannot be brushed aside behind the facade of secrecy because the deal primarily concerns a power reactor under the gaze of international monitors who will oversee that the plant is not used for any non-civilian purposes.

The agreement in principle to supply Pakistan the nuclear power reactor was formally announced during Chinese Prime Minister Li Peng's visit to Islamabad in December 89 although negotiations for it had started soon after Benazir's visit to China early that year.

Beijing which started building power reactors a decade ago has been seeking export markets for its nuclear manufactures. For this reason it had joined the International Atomic Energy Agency (IAEA) to gain acceptability in the international nuclear market which has no place for suppliers who do not agree to international non-proliferation regime. Pakistan, an energy-starved neighbouring country, a great friend of China and familiar with the ABC of nuclear technology, offered the best jumping board for China's debut in the international nuclear export market. The Benazir-Li Peng agreement envisaged supply of a 300 MW power reactor most of which was to be co-manufactured in Pakistan. In the several rounds of negotiations held then the Chinese left it to Pakistan to decide whether it wanted to turnkey or a semi-turnkey plant or a plant co-manufactured in Pakistan. That in no case it was to be a 100 per cent turnkey project was evident from Benazir's address to the National Defence College in early '90 wherein she said that the plant will be co-produced in Pakistan.

However, internal debate within the PAEC whether the power reactor should be acquired as a turnkey project or co-manufactured in Pakistan continued. In June '91 the Chinese submitted their bids for a completely turnkey project. As the internal debate was becoming divisive, PAEC asked China to also bid in case the plant had to be co-produced locally.

The Chinese submitted revised bids but not without presenting PAEC with a dilemma. It agreed to supply everything the PAEC needed to build and erect the plant locally but also demanded that in that case the Commission would be responsible for completion schedule, final costs and safety of the reactor. It was a tall order for the PAEC which did not want to take the risk of going alone. In a briefing to the Prime Minister during the latter's visit to Pinstech in May/June 91'the PAEC bosses therefore sought to convince him that local industry was not strong enough to undertake co-production of the nuclear power reactor. The Prime Minister who was then steaming by the slogans of indigenisation and self-reliance was not amused but agreed. As it is the contracted power reactor is a 100 per cent turnkey project. PAEC sources say that Beijing has set out to bring in about 2000 technicians, skilled and even unskilled workers to erect and commission the plant. "The Chinese have said that they will bring in even unskilled labour because they cannot afford to disrupt work schedule by employing local labour which every now and then resorts to strikes and lockout", said a source in the PAEC'. Drawing a comparison with another turnkey project undertaken by the commission he says,"At the time of construction of 130 MWKANUPP (Karachi Nuclear Power Plant) project in 1965 the Canadian supplier brought in only about 150 experts, technicians and skilled workers who in turn trained the locals, but in this case the entire workforce will come from China. As for the costs the PAEC officials are tight-lipped saying that the "Chinese suppliers have asked us to keep quiet about it as they have to market similar plants in other countries also". This may be true but Secretary General Foreign Office Mr. Akram Zaki himself recently disclosed that the plant would cost around 590 million dollars. However, the total cost of the 300 MW plant is much more as is indicated by the break up in the table.

By way of comparison the 1300 MW Hub power project in the private sector will cost less than 1100 million dollars. The contract which was signed on February 22, pertained to the supply of fuel and manpower development costing totally around 60 million dollars. The main agreement for the plant was signed in December last during Chairman PAEC'S visit to Beijing. When the main contract was signed in Beijing on the last day of '91 it was heralded as a new year's gift. A gift it was, but for whom for China or Pakistan? this indeed is the moot point.
COPYRIGHT 1992 Economic and Industrial Publications
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Copyright 1992 Gale, Cengage Learning. All rights reserved.

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Author:Babar, Farhatullah
Publication:Economic Review
Date:Apr 1, 1992
Words:891
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