KP’s plans for hydropower projects

Posted on August 29, 2011. Filed under: Hydal |

REPEATED attempts by the Khyber Pakhtunkhwa governments have failed to attract private investment for developing hydropower projects.

According to officials, the private sector’s financial constraints and poor security situation in the KP are mainly responsible for the poor response.

Hydropower happens to be a capital intensive sector. The average cost of developing hydropower projects, according to experts, comes to $2.5 million to $3 million per MW. Construction cost of even a small hydropower station runs into hundreds of millions of rupees. This induces local private enterprises receiving Letters of Interest (LoI) to form consortium to manage the needed funds. In the case of KP investors, loans are more difficult to obtain. Private and nationalised banks alike are cautious in giving loans to investors in the high security risk area.

Even the international lending institutions do not invest in the public sector projects located in the troubled areas. For example, the Asian Development Bank did not provide funds for the Daral Khwar hydropower project due to deteriorating law and order situation in the area.

Similar is the fate of at least three private sector hydropower projects in the security-troubled areas. They are: a 157 MW hydropower project in Madian in Swat, 197 MW power station at Kalam-Asrit and 548 MW project at Kaigah, district Kohistan.

“The investors are concerned about the future of their investments in these areas,” said a Peshawar-based official.

The work on the Kalam-Asrit project has not been initiated due to non-completion of the feasibility study. In the case of another project, the private party is finding difficult to arrange the funds required to finance the project.

“The sponsor now wants the provincial government to become an equity partner” says a wellplaced official. However, the government is unlikely to oblige.

According to a Peshawar-based official, land acquisition for the 147 MW Patrind hydropower project on the borders of KP and Azad Jammu and Kashmir is under progress. The project is scheduled to become operational by December 14, 2014.

The Suki Kinari hydropower project with an 840 MW generation capacity is passing through a crucial stage as the Lahore-based private party needs to meet the financial close deadline, being issued Letter of Support in July this year.

Situated on River Kunhar in the Hazara region of KP, the Suki Kinari hydropower project has been through a difficult time after the last KP government moved the Supreme Court to claim the province’s right over the project ownership.

However, the incumbent government withdrew the case, allowing the Private Power and Infrastructure Board to move ahead with its plan to allow the project in the private sector.

As per the 2002 power policy, provinces can set up in the public sector or involve private investors for projects up to 50 MW.

The previous KP government was of the opinion that after it was allowed to execute the 81 MW Malakand-III hydropower project, it was its due right to own and execute the Suki Kinari power project, too, involving a 840 MW generation capacity. The project, with an investment of over $1.1 bn, is supposed to become operational by December 17, 2017.

The provincial government’s new strategy prepared and executed by the Sarhad Hydro Development Organisation (Shydo) is likely to compete with the private sector. Its three hydropower projects earned over Rs2bn revenue last year.

The Shydo plans to set up 24 projects in the public sector and complete them in the next ten years. Twelve of them has a generation capacity beyond the 50 MW upper limit set for the provinces under the 2002 power policy.

Officials say that after the passage of the 18th Amendment this bar on provinces stands removed and, according to the KP government circles, the federating units can now execute hydropower project(s) with over 50 MW generation capacity.

They, however, say that the KP government will move the Council of Common Interest because as per the 18th Amendment, the provinces cannot engage private investors even for executing projects as small as of one MW generation capacity. “This is an anomaly,” says a development planner.

The Shydo is working on a project to conduct pre-feasibility studies on hydropower generation potential at 10 sites situated in Chitral, Dir, Shangla, Mansehra, and Swat. Each of the sites, said an official, involves up to five MW generation capacity. After the prefeasibility studies, said the official, the sites would be offered to the private sector for developing the hydropower stations there.

However, after the 18th amendment, the KP government circles believe that the province can only run projects in the public sector. “Under the given situation, private sector can only be engaged by the federal agencies,” said the official.


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Public limited company for KBD proposed

Posted on June 21, 2011. Filed under: Energy crisis, Hydal, Pakistan |

LAHORE, June 18: The Institution of Engineers Pakistan has urged the politicians not to intervene in technical matters like Kalabagh Dam which are essential for development of the country.

“Remember, if we fail now in making decision on Kalabagh Dam immediately, the coming generations are not going to forgive the present regimes,” said a resolution unanimously adopted at the 46th annual general body meeting of the IEP on Saturday.

It said the government had been unable to generate electricity in spite of having capacity to meet the total demand as major power houses were based on thermal fuel.

“To avoid heavy loss and crippling the country just on the threats of a few politicians, the only immediate solution lies in the announcement by the government to construct Kalabagh Dam on top priority basis,” said the resolution presented by IEP Lahore Vice-Chairman Syed Khalid Sajjad.

“The Kalabagh Dam is going to take five years in completion at a cost of $5 billion providing water for irrigation to all the provinces, controlling flood and providing electricity at a minimum cost of Re1 per unit up to minimum of 3,500MW. The project being right in the middle of load centre will have negligible cost of transmission.

“The next alternative is to construct hydel power stations on Bhasha Dam through Bunji tunnel which, however, are going to take 15 to 25 years with an investment of $15 to 25 billion for each project which will provide around 5,000 to 8,000MW each.

“Another hydel station under study on Neelum-Jhelum project is also a viable solution but will produce around 1,000MW only but can only be constructed not before five years and without having much capacity for accumulation of irrigation water.

“The politicians are requested to leave technical matters for decisions and implementation by the engineers being technical experts.

“Since government is short of funds because it has levied heavy taxation on furnace oil, diesel, petrol etc for use in thermal power houses and transportation industries belonging to public as well as private sector and have not cleared the bills of the Pakistan State Oil through collection of monthly revenue from consumers.

“The revenue collected by the government was much less than the cost of fuel imported and as such had entered in a circulate debt.

“The government should immediately set up Kalabagh Dam construction company on public-private partnership basis, having its stakeholders from all the provinces of Pakistan, to undertake the responsibilities of arranging funds by selling its shares in open market, finding solutions and arranging compensations to the people who are supposed to be the loser due to construction of the dam, reconciling the differences and developing harmony among the provinces, creating healthy atmosphere for construction of KBD, convincing and removing the apprehension of political, technical and general public of all the provinces in the larger interest of the country,” concluded the resolution.


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MNAs call for construction of dams to help overcome power crisis

Posted on June 17, 2011. Filed under: Energy crisis, Hydal |

JUNE 17, 2011


Both treasury and opposition members in the lower house of the parliament were unanimous on Thursday that construction of dams was vital to steer the country out of the electricity crisis. Taking part in the budget debate, Munir Orakzai was of the view that in present circumstances when the country was dependent on IMF, no better budget could be presented than the current one.

He urged the government to lessen its expenditures and also privatise those institutions running on losses. Lashing out at the role of NGOs in Fata, Munir said that these organisations were spending hefty amount on pays and other facilities to its officers and staffers while a small fraction of amount was being spent on the salaries of local teachers.

He regretted that despite announcement by the President and Prime Minister, cadet, medical and engineering colleges were not established in different agencies of Fata. He termed all the promises as verbal rhetoric, asking the government to take serious notice of the issue. He deplored that the martyrs’ fund for the Fata victims was less than the other provinces.

He observed that Fata could become self-reliant if the minerals were explored and utilised in a proper way. He further said that the government was engaged in dialogue to please US while it was the need of the hour to take care of masses. He said every member of NA and Senate should play his role for the uplift of Fata people. He called for setting up a trust for the victims of terrorism.

He also stressed the need of constructing dams to overcome the power crisis. Akhuwanzada Chitan said that government did not want increase in defence budget, but it raised the budget to ensure peace. He regretted that no heed was paid in the past to power crisis. He said incumbent government would construct dams and launch projects to overcome electricity crisis in the country.

He said that the government should allocate adequate funds and exploit Thar coal reserves to overcome energy crisis. He said that in the last year’s budget Rs 15 billion were given to Fata while only 30 percent of the amount was spent. He demanded that the amount should be taken back from Fata.

Rejecting the opposition’s criticism on the budgetary proposals, he said the opposition should rather give constructive recommendations for inclusion in the final budget document. Nauman Islam Shaikh termed the opposition’s criticism as unjustified. He said that incumbent government had adopted the policy of reconciliation by inviting all political forces to sit together to steer the country out of multiple crises.

He said the government had presented a balanced budget despite difficult circumstances. He said that increase in salaries and pensions besides reduction in GST would certainly give relief to the people. He asked the members to rise above their political affiliation to surmount the challenges being faced by the country.

Nafisa Shah said it was unprecedented that the cost incurred on floods and war on terrorism had been made part of the budget. She proposed the government to focus on education and health sectors to bring a positive change in the society. She said the National Commission for Human Development had been devolved under the 18th Amendment and responsibility rests with the provinces to oversee its performance.

Sardar Mansab Ali Dogar said it was the fourth budget being presented with the foreign debts. He criticised the government for imposing GST on agriculture inputs saying it would not be beneficial for the sector, which was the backbone of our economy.

Rai Mujtaba Kharal said that government presented a good budget by increasing salaries. He said that by presenting a historic balanced budget the government has proved that it is alive to the situation and striving to extend maximum relief to the masses. He reminded that it is the present government, which passed the 18th amendment and gave greater autonomy to the provinces, which will strengthen the federation.

Malik Abrar said that there was no implementation on the suggestions forwarded during the last year. He said that the masses were asking how they would get the relief. He was also critical over the increasing prices of electricity and petroleum products.

Ejaz Jakhrani held the PML-N responsible for ongoing load shedding. He recalled that Benazir Bhutto had brought Rental Power Plants (RPPs) in 1993 but after that no power project was launched, which led to power crises. He demanded a compensation package for flood victims of his constituency. He welcomed reduction in general sales tax saying it will directly benefit the poor segment of the society. He said that the concerned authorities should enlarge its tax sector and seven hundred thousand affluent persons identified by the FBR should pay their taxes to turn around the economy. He suggested the government waived off loans of small farmers who are badly hit by last year’s floods.

Mufti Muhammad Ajmal said the government should check its excessive spending to divert the resources for the welfare of the people. He said efforts should be made to broaden the tax net, as it is imperative for the revival of the economy. He said that officials of impeccable character should be deputed in the state-owned enterprises to transform them into profitable entities.

Tasneem Siddiqui asked the government to work on war footing to overcome the energy crisis. He said the government should immediately release funds for the completion of on-going hydel projects. Raheela Yahya Baloch opposed levying of tax on the agriculture saying the government should rather give subsidies to the farmers to ensure food security.

Bushra Gohar said the government should impose only direct taxes as indirect taxes are adding to the problems of the poor people. She said the government should check its fiscal deficit as it is ultimately affecting the lives of the poor people. She said everyone talks about the controversial Kala Bagh Dam, adding they do not talk about the Tangi and Munda dams.

Sajid Ahmad said more resources should be allocated for the education sector to deal with the mindset of extremism and terrorism. He said cargo under Afghan Transit Trade Agreement should be transported through Railways, as it will help make the entity profitable. He said special steps should also be taken for the welfare of overseas Pakistanis who are greatly contributing to the economy by sending remittances back home.

Pir Haider Alli Shah said the terrorism is the biggest challenge faced by the country today but regrettably the government has not taken any concrete steps to deal with it. He asked the government to take on board all the stakeholders to defeat the menace. He said that Khyber Pakhtunkhwa province produces 6000 MW electricity while only 2000 MW is given to it which were insufficient to meet the demands.

Ghulam Mustafa rejected the impression that the agriculturists are not paying taxes. He said the farmers are ready to pay tax but the federal government should also evolve a transparent policy in this regard. Begum Ishrat Ashraf said that despite passage of three years government has provided no relief to the poor in power sector. She said due to rising inflation it has become difficult for the people to make both ends meet.

Mehboobullah Jan said that besides hydel projects the government should also focus on other resources to provide cheap electricity to the domestic consumers and industrial units.

Sardar Saleem Haider recommended the government to enhance the minimum wage to ten thousand from seven thousand rupees. He said that profit on national savings should also be increased to benefit the account holders mainly widows and pensioners. Tariq Fazal Chaudhry said the government should take serious steps towards the resolution of problems and implement the resolutions passed by the parliament.

Pervez Khan Advocate while participating in the debate said that the Higher Education Commission is a provincial subject now and allocation of funds for it in the federal budget is in total disregard to the constitution. He regretted that the budget envisages no funds to deal with any future natural calamity. Syed Imran Ahmed Shah asked the government to reject foreign assistance and take the country towards self-reliance. He demanded of the government to take steps for halting drone attacks.

Criticising the previous regimes for abandoning the Thar coal project, Mir Munawar Ali Talpur said it is the present government that resumed work on this important project to generate thousands of megawatt of electricity. He said priority should be given to the development of Balochsitan and Sindh to remove the grievances of the people.

Minister for Health Mian Riaz Hussain Pirzada said all of us should respect the defenders of the borders, as casting doubts on them is not in the interest of the country. He said the joint resolution passed by the parliament is the voice of the people and its implementation is imperative for the sanctity of this House.

Terming the budget as people-friendly, Farhat Khan said the government is striving to improve the lot of the poor people through a number of initiatives. Shaheen Ishfaq described the budget as unbalanced and anti-people and said the government miserably failed to provide relief to the people. She said instead of cutting its expenditures the government has passed on the burden to the people.

Copyright Business Recorder, 2011

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Malaysian firm signs accord with Laraib Energy

Posted on June 16, 2011. Filed under: Hydal |

ISLAMABAD, June 15: TNB Remaco of Malaysia has entered into an agreement with Laraib Energy to provide services worth $14.1million for operation and maintenance of 84MW New Bong Escape Hydroelectric Power Complex on River Jhelum.

The services for $235 million power project in Azad Kashmir will be provided for an initial period of five years, with an option of extending it for another seven years.

The 15-month mobilisation period for the project is likely to commence in August this year.

The agreement was signed on Wednesday in Kuala Lumpur, and was supervised by the Pakistan High Commissioner Masood Khalid, says a message received here.

Under the project, TNB Remaco will extend technical personnel and skilled expertise to perform daily operations as well as routine maintenance of the complex.

The new agreement is the second major collaboration between TNB Remaco and HUB Power Company, a key shareholder of Laraib Energy, following a similar agreement signed earlier.

High Commissioner Masood Khalid said that Malaysian investors and businessmen have vast opportunities for investment in Pakistan’s energy sector given a massive gap between demand and supply with power shortage reaching 7000MW at peak hours in the current summer.

President of TNB Remaco, Datuk Seri Che Khalib Mohamad Noh said that the agreement would further augment TNB Remaco’s reputation as a one-stop service provider for power-related works.

Laraib Energy’s chairman and Hub Power’s CEO Vince Harris said his company had so far invested $235million on the hydroelectric power plant in Azad Kashmir and it was well advanced in commercialisation.

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Joint management of water proposed with Afghanistan

Posted on June 14, 2011. Filed under: Hydal |

ISLAMABAD, June 13: The World Bank has offered finances and services as an ‘honest broker’ to help Pakistan and Afghanistan in joint water management under a bilateral treaty on the pattern of Pak-India Indus Waters Treaty of 1960.

Sources told Dawn on Monday that the lending agency that had brokered Pak-India treaty and later helped Pakistan in development of Mangla and Tarbela dams has already done necessary work, including arrangement of about $12 million from five other lenders to finance at least four technical studies and the negotiation process.

“It is in the bank’s financial clout and its worldwide experience that provides the necessary incentives for reaching a trans-boundary agreement and paving the way for its successful implementation,” said a World Bank communication seeking support from the two neighbours. “As the most suitable institution for such an undertaking, the bank would sponsor and promote this crucial dialogue and cooperation between Afghanistan and Pakistan for economic development and security in the region,” it added.

The World Bank has proposed putting in place a mechanism for dispute resolution and joint management of water resources by the two countries with the name of Kabul River Basin (KRB) Management Commission on the pattern of Pakistan-India Permanent Indus Commission.

The World Bank’s eager ness to assist the two countries in shared and integrated management of water resources is seen here as a key development because it enjoyed three essential elements for its successful execution. These are political neutrality, international experience and technical expertise for development and implementation of such arrangements and financial resources to finally bring such efforts to reality on ground.The sources said the bank wanted to develop institutional capacity in both countries, particularly Afghanistan, for promotion of greater cooperation and understanding through exchange and sharing of hydro-meteorological data of the KRB between the two countries and development of a management plan using hydrological, hydraulic and economic models.

A $3.5 million component of the project would assist dialogue for greater cooperation on utilisation of water and development of a joint system for data collection, verification, analysis, storage and dissemination through geographic information system (GIS) and digital elevation model (DEM).

Another $2.5 million component aims at development of projects and programmes for multi-sector options on a long-term scenario, combined with economic modelling, climate impact, drought mitigation and other aspects of energy, agriculture and tourism.

Another Rs3 million study would design a permanent KRB management commission jointly managed at the highest level by Afghan and Pakistani specialists support ed by sub-basin councils. The entire programme has to be implemented in four years.

The sources said international non-governmental organisations like South Asia Water Initiative (SAWI), Afghanistan Reconstruction Trust Fund (ARTF), MultiDonor Trust Fund (MDTF) and Climate Change Adaptation Fund have already agreed to support the World Bank move.

The bank has estimated that the average annual flow of Kabul River is about 21 billion cubic meters (BCM). Kunar River, with major contribution of 75 per cent in the Kabul flows, draws more than 60 per cent of water from the Chitral area of Khyber Pakhtunkhwa.

Islamabad has been worried over New Delhi’s increased help to Kabul for development of a number of storages on the Kabul River without addressing Pakistan’s concerns. Pakistan had hinted at diverting Chitral River before its entry into Afghanistan in the event of attempts made to deprive it of its due share.

Pakistan gets about 17 per cent water supply from the Kabul River when Indus flows decline in winter. Pakistan and Afghanistan currently share nine rivers with annual flows of about 18.3 million acres feet (MAF). Out of this, the Kabul River has water flows of 16.5 MAF, to which Chitral River, originating in Pakistan, contributes about 8.5 MAF. After entering Afghanistan, the Chitral River becomes the Kunar River, joins the Kabul River near Jalalabad and then reenters Pakistan.


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KP wants net hydel profit uncapped

Posted on June 14, 2011. Filed under: Hydal |

PESHAWAR, June 13: The Khyber Pakhtunkhwa government has decided to take up with the centre the issue of uncapping net hydel profit, which has been lingering on for over a year.

“The attitude of Wapda is somewhat discouraging. It appears it doesn’t want resolution of the issue,” Sahibzada Mohammad Saeed, provincial secretary finance, told a post-budget press conference here on Monday.

Finance Minister Humayun Khan, Information Minister Mian Iftikhar Hussain and secretaries of provincial departments were also present on the occasion and responded to the questions of journalists.

Prime Minister Syed Yousuf Raza Gilani had constituted a technical committee, comprising officials from the provincial and federal governments and Wapda, to come up with recommendations for devising a permanent formula for working out the net hydel profit, capped in 1991-92 at Rs6 billion annually.

Technical committee constituted for the resolution of the matter has held several meetings, but it could not reach any conclusion mainly because of indifferent attitude of Wapda, explained Mr Saeed.

According to him, the chief minister had written a letter to the prime minister, seeking his intervention to resolve the issue that was supposed to be settled within one month.

He said the prime minister would address the issue after passage of the federal budget, adding, “we are pretty confident that something good for the province will come out.” Earlier, the finance minister while commenting on the next budgetary proposals tabled in the provincial assembly, said efforts were being made to increase revenue receipts that were hardly 3 per cent of the entire budget at the moment.

Revenue from royalty on oil and gas was growing annually and it had reached Rs16 billion this year, he said and added that the earning from hydropower generation will also be increased from the current Rs2.11 billion in addition to the net hydel profit.

The minister said that the provincial government was undertaking a number of hydel power generation projects, which after completion would enhance the province earning.

To a question, he clarified that arrears from the federal government on net hydel profit were being spent on income generating projects other than hydropower projects.

To a question, an official of the Provincial Disaster Management Authority (PDMA) explained that last year floods had inflicted a loss of Rs105 billion on the provincial infrastructure. He explained the provincial government suspended the Annual Development Programme (ADP) for 45 days for relief and rehabilitation of the victims.

The PDMA, he said, had so far disbursed Rs5.81 billion among the households affected in floods, adding the first phase would be over by June 25, while the second installment of Rs40,000 would be disbursed after that.

Secretary Planning and Development Salim Khan explained that the provincial government had initiated 154 schemes of rehabilitation at a cost of Rs14 billion, adding that most of the schemes related to early rehabilitation of flood-hit areas had been completed, while the remaining would be completed by the end of next financial year.

Mr Khan explained that the provincial government was giving priority to productive sectors, adding that Japan International Cooperation Agency and Asian Development Bank were providing financial assistance for reconstruction of roads and hydel power stations in the province.The finance minister further explained that the provincial government had tried to extend maximum relief to the masses in the budget and proposed a number of public welfare schemes.

To a question, the minister clarified that the professional tax levied on the professional colleges in the private sector would not hurt the students because the government would make sure that these colleges did not pass on its impact.


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Mirani Dam termed a big disaster

Posted on June 14, 2011. Filed under: Hydal |

Senator Dr Abdul Malik on Monday termed Mirani Dam in Balochistan a “mega disaster”, saying all the government assessments and forecasts about its utility have proved drastically wrong.

He was speaking at a seminar on “Mirani Dam: Development or Disaster”, organised by the Sustainable Development Policy Institute (SDPI).

The dam’s construction started in 2002 was completed in 2006.

Other speakers demanded an early compensation for the 2007 Mirani Dam flood-affected population. They also called for an evaluation report on the dam, adding it should consist of technical, financial, social and environmental thirdparty audit.

Dr Malik said he supported building of dams in Balochistan because rainwater goes waste every year which can be stored and used for vast cultivable areas in the province. But he added that local people had strong reservations about the dam’s design and claims of the Musharraf government that it would help irrigate 32,000 acres. “The dam is just irrigating 3,000 to 4,000 acres. Vast lands between Turbat and Pasni have become uncultivable due to this dam.” The senator also talked about evidences of corruption and misdeeds of those who were overseeing the dam’s construction. He urged early recovery and compensation for the Mirani Dam flood-affected people of three union councils. ‘They are living under open skies without basic facilities for the last four years.” Arshad Abbasi of SDPI said the dam was a classic example of design failure. “The upstream population was affected due to floods and backwater flow from the dam in 2007.” He lamented that no commission or settlement plan has been announced by the government despite heavy damages to local population.

He demanded that a post-project evaluation report consisting of technical, financial, social and environmental thirdparty audit be initiated immediately. “Although dams in Balochistan were necessary due to rapidly depleting groundwater level, consideration of catchment and watershed management will be vital for developing dams. So far, this has been not taken into account.” Sharif Shamazai of the Institute for Development Studies and Practices (IDSP), Quetta, said Mirani Dam was constructed to provide water to Gawadar and adjacent naval base and not to benefit local people or to irrigate 33,000 acres. He added that survey and feasibility was completed unprofessionally, ignoring the feedback and reservations of local communities on the dam’s’ design. “The locals had proposed 80 feet height and 1200 feet wide spillway, which was ignored and resulted in a mega disaster.”


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Nine hydel projects: ‘work to be undertaken within next five years’

Posted on June 14, 2011. Filed under: Hydal |

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Water and Power Development Authority (Wapda) will undertake work on nine hydel power projects with a capacity of generating more than 24,000 mega watts electricity during the next five years, while Diamer-Bhasha and Kurram Tangi Dam Projects are ready for construction.

This was stated by Governor, Khyber Pakhtunkhwa, Barrister Masood Kausar during a briefing here on Saturday. The governor, on a point, assured full security for Wapda consultants and contractors working on different projects Fata and directed to resolve all issues hindering progress of work on these projects. He particularly referred to Bara Dam project and said that it would have far reaching impact on the socio-economic condition of the entire area, both in the tribal and settled ones.

He asked Nespak to complete detailed engineering design of Bara Dam project, so that it could be implemented at the earliest. Regarding provision of funds for Bara Dam project, he assured that the matter would be taken up with the federal government at appropriate level.

Earlier, Chairman Wapda, Shakeel Durrani briefed the governor about the ongoing as well as planned projects including Bara Dam inKhyber Agency, Kurram Tangi Dam in North Waziristan Agency, Munda Dam in Mohmand Agency, Golen Gol Hydle Power Project in Chitral, Tank Zam and Daraban Zam Dams in D.I.Khan. He also presented an overview of the total current hydel stations operations, adding that the total installed capacity of 14 hydel stations in operation is 6,464MW while 1,405 MW was in process.

The meeting was told that feasibility study of Bara Dam was completed in 2008 and the project, approved by ECNEC would cost above Rs 14 billion. Detailed engineering design and preparation of Tender documents were in progress. The project would be completed in five year’s period and on completion, would make the existing irrigation system functional, create job opportunities, reduce flood damages and provide treated drinking water besides generating 4.8 MW power.

With regard to Kurram Tangi Project, it was stated that the project, having 84 MW power generation capacities is ready for construction and would be completed in four years period with an estimated cost of Rs 59 billion. Regarding Munda Dam, the meeting was informed that work on its documentation is in progress, including short listing of consultants for detailed engineering design and preparation of tender documents.

The design will be completed within two years with total construction period of seven years. Munda Dam, as stated, is a multi-purpose dam to boost agriculture, produce power up to 740 MW and mitigate flood damage in Peshawar and Nowshera valley.

During the briefing, it was stated that nine projects with total capacity of 1628.76 MW are under execution including Gomal Zam Dam in Fata, Khan Khwar, Duber Khwar and Allai Khwar in Khyber Pakhtunkhwa, Satpara Dam in Skardu and Jinnah Hydropower and Neelam Jhelum project besides repair and maintenance of Unit1, 3 and 4 of Tarbela Dam.

Chairman Wapda, while briefing the governor, said that all out efforts would be made to fulfil the commitment of completion of dam projects. He informed that Wapda has planned to establish a good quality school in the vicinity of their projects and requested proper support in this regard. He also informed that Wapda would also upgrade the nearby hospitals for better health cover to the local people. These measures, he added, would help building confidence among the locals and also improve the socio-economic conditions of the respective areas.

The meeting besides others was attended by the Chief Secretary Khyber Pakhtunkhwa Ghulam Dastagir Akhtar, Attaullah Khan Chief Executive FDA, Fazal Karim Khattak Additional Chief Secretary Fata and Sikandar Qayyum Secretary to Governor.

Copyright Business Recorder, 2011

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137 percent rise in hydel-based power tariff on the cards

Posted on June 14, 2011. Filed under: Hydal |

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A total of 137 percent raise in hydel-based power tariff is on the cards, as WAPDA in a very surprising and unexpected move, has filed a petition to NEPRA for determination of hydel-based generation tariff for Fiscal Year 2011-12.

Experts from the power sector are of the view that WAPDA, in other words, has pushed NEPRA to raise consumer-end tariff by another 8 percent in one go in a situation when the government is looking for ways and means to mitigate any further increase in consumer-end tariff.

It may be noted that in the last month 2 percent increase in tariff had resulted into massive agitation across the country. These circles have further feared an increase in circular debt with WAPDA’s present petition to NEPRA.

Interestingly, most of the prayer/petition to NEPRA is based on indefensible grounds with a single point agenda of squeezing the hapless consumers further in the days to come.

The proposed tariff in the WAPDA petition is based on projected net electrical output of 30,783 GWh (or 30,786 billion units) against an estimated total revenue requirement of Rs80, 890 million, which takes the per unit cost from existing level of Rs1.05 (as propagated by WAPDA instead of the actual Rs1.18) to Rs2.69, or 137 percent increase in one go.

Based on the earlier actual tariff of Rs1.18/ unit, it is seen that the power customers would be further burdened by a hefty Rs45-50 billion, which in turn translates into the requirement to enhance PEPCO’s existing consumer end tariff by another 8 percent. If we add the requirement as informed by the Ministry of Finance then the consumers may be burdened by a total of 24% in FY 2011-12.

Further, the sources mentioned that the per unit cost of hydel generation could remain Rs2.69 only when ideal situation prevails and it is likely to shoot up to Rs5 per unit in case of poor hydrology (due to drought or such other conditions) for the same quantity of generation.

It may be noted that WAPDA owns and operates 13 hydel power stations, having installed capacity of 6,444MW. However, on commissioning of Khan Khwar Power Station (72MW) in December 2010, the installed capacity has been increased to 6,516MW.

The tariff petition of WAPDA Hydroelectric has been prepared in view of its Audited Financial Statements for FY 2009-10 and projected change in revenue requirements for FY 2011-12.

The power sector sources are of the view that the tariff petition is based on very poor grounds, carrying no substance if an independent analysis is made.

These circles have mentioned that WAPDA tariff petition has pointed out that the Regulatory Assets Base (RAB) has increased to Rs213, 593 million from Rs143, 054 million due to more capital investment in the ongoing projects.

According to these circles, shifting of the cost of ongoing projects towards the consumers in the shape of tariff is not understandable. Especially, when these ongoing projects are delayed due to late decision making of WAPDA, they added. According to these sources all projects of WAPDA are delayed.

They said the hydel projects like Khan Khwar, Alai Khwar and Duber Khwar were due to be completed by 2006, but delayed till date. Only Khan Khwar has been completed in December 2010, which can be dubbed as nothing but poor performance. Similarly, Neelum-Jhelum and Mangla Raising projects are also delayed by a period of three to four years.

The power sector circles agree that earthquake of 2005 had impacted the completion of some of these projects, but still a delay of four years in some projects is unacceptable. The irony is that the WAPDA has decided to shift the cost towards the consumer by filing a petition before NEPRA, they added.

Similarly, the tariff petition has suggested that the Operation & Maintenance (O&M) cost has increased to Rs10, 629 million from Rs4, 114 million due to revision in Pay & Allowances as well as increased maintenance cost. According to the sources, the O&M cost is calculated on the basis of Wholesale Price Index and this indexation never crosses to 15 percent maximum in a year. In WAPDA’s case, it can increase to 30 percent for two years, but an increase of 150 percent, as suggested by the O&M cost in the petition, is not easy to digest. They said it suggests that WAPDA was simply trying to generate funds by increasing the price of hydel units.

The power sector circles has raised eyebrows over WAPDA’s claim in the tariff petition that the other income of hydel activities has decreased to Rs825 million from Rs2, 708 million. They said the other income comes through sale of fish and logs and it should have been increased in any case, but the WAPDA petition suggests that it has come down tremendously. However, a few other circles have pointed out that decrease in other income could be due to wastage of fish and logs in last year floods.

Copyright Business Recorder, 2011

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