Source: Trading Markets

LAHORE, Apr 04, 2008 (AsiaPulse via COMTEX) — – Pakistan’s PPP-led coalition government seems to be planning to lift the three-year embargo imposed on the power production in public sector with the launch of the first 525MW Chichoki Mallian power project on Tuesday. However, sources concerned said the Ministry of Petroleum and Natural Resources did not confirm the availability of gas for the project, being formally launched and signed in the presence of the Prime Minister at the Prime Minister Secretariat on Tuesday.

The project, hopefully to be completed by January 2011, will be connected with the system through 42km of double circuit 132KV transmission lines. It will generate about 2,630Gwh of electricity per annum, the sources maintained. The US$355 million combined cycle power plant, the only project being constructed in public sector at Chichoki Mallian, will increase the capacity of the existing thermal power plants. The power generation cost has been calculated at Rs2.62 (US$0.04) per unit whereas the rental power projects, handed over to the Pakistan Electric Power Company (Pepco), have been costing 7.5 cents to the Water and Power Development Authority (Wapda).

Wapda has been forbidden from installing power plants to meet the current power shortage despite the fact that the Ministry of Water and Power had approached the then Prime Minister several times for reversal of his earlier decision. Wapda was prevented from facilitating the Independent Power Producers (IPPs), however, to get permission vis-a-vis setting up a 525 MW thermal power plant at Chichoki Mallian (Sheikhupura) in the public sector.

Wapda, on the other hand, had forced to installation of expensive container-mounted generators on a rental basis with a total capacity of 250MW. While three separate power plants, having a total capacity of 600MW were being constructed outside Lahore, Gujranwala, Faisalabad. They were to come into production by December 2007.

The sources said that the Ministry had submitted the same proposal to the Prime Minister two months ago. The Prime Minister did not accord the approval of thermal power project in the public sector due to prospects of generation by the IPPs, but the Ministry has proposed that the matter may be reconsidered to meet the increasing power demand, the sources added.

Talking about the only project which received the prime minister’s permission, they said, the project would be completed within two years from the date of contract at a total cost of Rs 18 billion (US$286.68 million), including Rs 6.059 billion as local cost besides the cost equivalent to Rs 11.99 billion foreign in exchange.

Local resources would be provided from the Public Sector Development Programme (PSDP) while foreign cost would be met through supplier credit or bonds for which the federal government would provide sovereign guarantee, the sources maintained. The combined power cycle power plant (furnace oil + gas) would consist of two gas turbines of 334MW and one steam turbine of 167MW along with necessary transformation, transmission and protection equipment.

The power demand projection based on medium growth rate shows that it would be increased from 15,500MW in 2006 to about 21,500MW in 2010. The government has also anticipated 1,300MW power shortage in 2007 which moved on to 2,300MW. The government has planned to add about 1,260MW through hydro, 900MW on coal, 4,860MW combined cycle on gas, 160MW on oil and 700MW through wind and solar by 2010, the sources said, adding that a 325MW capacity nuclear power plant is expected to be added to the system by 2011.

They said, Wapda’s experts had carefully examined the impact of the project on environment by calculating emissions in case of operation on the furnace oil and gas, in the light of World Bank standards and found it safe in all respects. However, separate study would also be conducted for second opinion.

It is pertinent to mention that the project has already been cleared by the Central Development Working Party (CDWP) and is also expected to be approved by the Executive Committee of the National Economic Council (Ecnec) headed by the Prime Minister.

(THE NATION)

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Tags: Chichoki Mallian, Natural Resources, Petroleum, Power plant, PPP