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Private sector power projects.

Private Sector Power Projects

Twenty one proposals have been received by WAPDA for generation of power in the private sector. Nine letters of intent/support have so far been issued. The seven of this fast track projects are expected to generate 6552 MW of electricity. Some of the power units would be oil fired, some gas fired, some coal fired and two hydel projects. Preliminary work on seven projects is complete and actual construction would be taken up during the current year. A Pakistani firm in association with the Russian counterpart has come forward to install 800-1000 mw power generation capacity at the developed site of Jamshoro Thermal Power Complex where WAPDA has already installed four units of 880 mw capacity.

Twenty one proposals have been received by WAPDA for generation of power in the private sector. Nine letters of intent/support have so far been issued. The seven of this fast track projects are expected to generate 6552 MW of electricity. Some of the power units would be oil fired, some gas fired, some coal fired and two hydel projects. Preliminary work on seven projects is complete and actual construction would be taken up during the current year.

The entrepreneurs who intend to set up power generation units in the private sector are assured a good profit. A number of incentives/concessions had been offered to the private entrepreneurs. Private sector firms have been offered a tariff 20-25 per cent higher as compared to WAPDA's cost of thermal generation. For example, the Hub River Power Group has been offered the rate of Rs. 1.03 per kwh (unit) and APTEC, Rs. 1.05 per kwh in the sale-purchase agreement with WAPDA, while WAPDA's own average thermal generation cost comes to around 80 paisas per kwh. This agreement which is affected for 25-30 years comprise of a number of additional clauses including increase in the power purchase price depending on escalation in the price of oil etc.

Implementation agreement for assured purchase of at least 60 per cent plant factor. In case of WAPDA requirement of more power than 60 per cent, the entrepreneur will get a higher sale price as is the practice all over the world where power is bought by a utility from a private enterprise. A scheme is going to be introduced soon under which WAPDA will buy their surplus power from the industrial units having their own generation at a rate of about Rs. 1.5 per kwh (unit). They will be entitled to get power for eight weeks during the year when they close their plant for repair/maintenance purposes and for additional four weeks in case of any emergent shut down of their plant. In such cases, they will not need any investment for fuel, spares etc., for these three months as they will have assured standby power from WAPDA without the payment of any fixed charges (MDI).

Besides the Hub River Thermal Power Plant of nearly 1300 mw, a Pakistani firm in association with the Russian counterpart has come forward to install 800-1000 mw power generation capacity at the developed site of Jamshoro Thermal Power Complex where WAPDA has already installed four units of 880 mw capacity. WAPDA sources disclosed that despite the fact that the plant cost had gone up by 20-25 per cent in the past two years, the same cost for new generation facilities installation has been offered by the intending group. The pay back in this case will be in the form of sale and supply of Pakistani made garments.

Power generation increased from 7894 megawatts in June 1990 to 8314 mw in December 1990. The Private Power Cell, Ministry of Water & Power invited Expression of Interest (EOI) by International consortia for prequalification to set up a large private sector thermal power plant based on imported coal. It is entirely independent power plant offered to the private sector over and above the Hub River Project. The imported coal plant will be about 20 km. away from the site of the Hub River power plant. Both the stations are of significant importance to the country to meet its fast increasing power demand. The Hub River project is very much active. Final negotiations are scheduled to be held with the sponsors shortly. The Gulf situation did cause some postponement in the travel plans of the management of the company. However, all is set for bringing the project to a financial close and commencement of construction in the next one or two months.

Coal Fired Power Plant

A 24 MW coal fired floating power plant will be built at a cost of 26 million dollars with a foreign investment of 12.5 million to provide electricity to industries in the Winder Industrial Trading Estate beyond Hub Chowki in Balochistan. It is a tripartite joint venture among the German investors contributing 12.5 million dollars, Lasbela Industrial Estate Development Authority (LIEDA) and local investors represented by Farooq Siddiqui. The project sponsored by LIEDA under self-generating scheme will be accomplished by Balochistan Electric Works Limited, a public limited Pak-German joint venture in power generation.

The power station first of its kind in Pakistan will be floating on a platform in the sea and will use low grade local coal making generation cheaper. It will be completed in 18 months time. The German investors will have three roles in the project namely the equity participation, supply of machinery and the investment. Besides the German contribution of 12.5 million dollars an amount of 13.5 million dollars will be loaned by the IMF. The present electricity requirement of the Winder Industrial Estate is 32 MW and the KESC is supplying 16 MW.

The German investors will run the power plant for 10 years training the local cadre for shouldering the future responsibilities. The power plant to be based on low grade coal will not cause any pollution in the air or in the sea because a special technique will be used to desulphurise the sulphur. Messrs. Karl Bay Gmbh have supplied similar plants to China and other countries. [Tabular Data Omitted]
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Publication:Economic Review
Date:Mar 1, 1991
Words:1017
Previous Article:National Power Control Centre - Islamabad.
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