ISLAMABAD: Almost all the provinces on Monday raised serious objections over the Rs370 billion worth of the three-year investment plan of the National Transmission & Despatch Company (NDTC) for allegedly ignoring their power generation projects to be linked with the national grid including those already cleared for construction.

The National Electric Power Regulatory Autho­rity (Nepra) which held a public hearing agreed to the concerns of the provinces and asked the national grid operator to take the provinces on board before it could be approved.

The regulator had called a public hearing to examine if the claimed investment of Rs369.222bn under multi-year tariff (MYT) over the control period (2023-25) was justified.

On a question, the regulator was informed that the NTDC had not shared the investment plan with the provinces before the public hearing although virtual meetings were held with provincial energy departments before finalisation of the plan.

The Balochistan government raised reservations over the three-year investment plan and its representatives said the provincial government had asked for a transmission line for the connection 300MW Gwadar power project.

The Sindh government demanded that interconnection lines in the province should be handed over to its special entity – Sindh Transmission and Despatch Company (STDC). It also demanded that employees of the STDC should also be made part of the NTDC’s Rs582 million training programme.

The government of Khyber Pakhtunkhwa complained that its several projects were included in Indicative Generation Capacity Expansion Plan (IGCEP) but those projects had been ignored in NTDC’s investment plan.

The government of Punjab said that industrial and commercial growth be catered to by NTDC and foreign-funded projects should be handed over to the province to complete from its resources. It said the NTDC paid commitment charges on foreign loans and penalties for delay in start-up and completion of projects which should be made public.

The power regulator said that NTDC investment plan required a lot of further clarifications and questioned why the transmission company was shifting from an annual tariff mechanism to a multi-year tariff mechanism. NTDC’s representatives said that since distribution companies had shifted to MYT, it was more prudent for the grid operator to synchronise its tariff mechanism with Discos.

The regulator also asked the NTDC to re-submit a fair investment plan in which small provinces, particularly Balochistan, were not ignored. It also asked the NTDC to address concerns raised by other provinces and cautioned that an investment plan prepared without the coordination of the provinces could lead to project delays and cost overruns and advised that at least mid-term consultation with the provinces every year should be a must. It sought a detailed timeline for the completion of projects included in the investment plan because transmission tariff would be closely linked to investments for which monthly or quarterly reports should reach the regulator.

In its investment plan, the NTDC said the proposed investment was required to meet the requirements of expanding the transmission network with the induction of new power plants and technologies in various parts of the country into the network, rehabilitation of the existing network and the need for new technologies to contain losses.

It said about 45pc (Rs167bn) of its investment would be utilised over the three years for power evacuation projects as new power plants achieve commercial operations while another 43pc (Rs158bn) investment would be used in removing system constraints through rehabilitation, upgradation and expansion of the national grid.

The remaining 12pc investment would be used equally (6pc each) for new special industrial zones of Dhabeji, Haripur, Swabi, Lahore and Faisalabad under the China-Pakistan Economic Corridor (Rs24bn) and protection upgradation and use of the latest equipment for system conversions like from 220kv to 500kv and so on (Rs21bn).

The company that evacuates power generation from all power plants and delivers to distribution companies across the country said it would spend a total of Rs114bn in FY23, Rs145bn in FY24 and about Rs110bn in FY25. Of the total Rs370bn, about Rs165bn would be utilised in Punjab, followed by Rs135bn in Khyber Pakhtunkhwa, Rs23.5bn in Sindh and Rs12bn in Balochistan besides Rs34bn in other areas and sectors.

It said the Rs266bn investment over the previous investment period (2018-19 to 202-22) helped reduce its transmission and transformational losses from 2.9pc to 2.6pc the country was now better placed when compared to regional peers like India and Bangladesh and very close to 2.5pc in Sweden and Ukraine etc.

The performance of loss reduction in the national grid, it said, was improving consistently over the last three years and hence required additional investments to build upon the progress and to sustain.

Published in Dawn, january 3th, 2023

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