ISLAMABAD: Amid the ongoing controversy over the route of the China-Pakistan Economic Corridor (CPEC), the government on Thursday assured a Senate panel that energy projects of the multibillion dollar flagship programme were not changed, but prioritised in a phased manner.

Briefing the Senate Standing Committee on Water and Power, Water and Power Secretary Younas Dagha said there was no change in the energy projects which were being set up in all the four provinces and Azad Jammu and Kashmir.

He also told the committee that the Neelum-Jhelum Hydropower Project still faced a shortage of $470 million and that the 425mw Nandipur Combined Cycle Project would be completed by June 30 this year.

Know more: Analysis: China-Pakistan corridor or labyrinth?

The meeting was chaired by committee chairman Zahid Khan of the Awami National Party (ANP), who recommended the termination of contracts for Golen Gol Hydropower Project in Khyber Pakhtunkhwa after alleging irregularities in its bidding and award of contract process.

Mr Dagha said coal-based power projects were planned in all the four provinces but their development had been divided into two phases. In the first phase, only those projects which could be completed in three to four years had been prioritised, such as Thar, Port Qasim and Sahiwal. These are also projects that will use local coal given the capacity constraints of Pakistan Railways as well as the ports.

He explained that only one 1320mw coal-based project at Sahiwal had been prioritised because Pakistan Railways had the capacity to transport coal only for this project at this early stage. Railways would need to augment its capacity with additional bogies and locomotives to transport coal for additional power plants.

Therefore, the government has decided to take only those projects in the first phase which could be developed without any additional investment.

In the second phase, the government plans to set up more power projects at Thar, Hub, Gwadar, Kallar Kahar, Muzaffargarh, Rahimyar Khan and in KP. Moreover, Gadani Coal Power Park project would be initiated after completion of the feasibility study. He said that Engro’s coal power project in Thar was expected to achieve financial closure by April this year.

He said the coal-based power projects could attract only Chinese investment and hence Chinese private investors were coming up for coal power projects without any government investment.

Responding to a question, Water and Power Development Authority (Wapda) Chairman Zafar Mahmood said the strategic Neelum-Jhelum project in AJK was still facing a $470 million funding shortage and the federal government would revise the project documents (PC-1) of the project that could further increase its cost from previous estimates of Rs275 billion.

He said the project could be delayed beyond November 2016 if necessary funds were not made available in time. He said a revised PC-1 of the project was being finalised for approval of the project because even the previous cost revision from Rs84 billion to Rs275 billion after the earthquake had not taken into account various taxes and duties and other unseen expenses. He said the revision could further escalate the project cost.

Published in Dawn, February 20th, 2015

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