ISLAMABAD, Oct 28: The Federal Government on Thursday drastically reduced the time period for processing of power sector investment proposals to encourage fast track development of new projects in the private sector.

A decision to this effect was taken here at a meeting of the Private Power and Infrastructure Board (PPIB) presided over by Minister for Water and Power Liaqat Ali Jatoi.

The meeting approved the package prepared by a special committee constituted by the government to simplify the procedure and reduce processing time of new investments in the power sector.

Under the decision, the processing time for unsolicited proposals, which are submitted by the investors, has been reduced from 465 days to 185 days. Similarly, the time period for solicited proposals, which are approved through competitive bidding has been reduced from 490 days to 306 days.

Accordingly, the simplified procedure also include pre-qualification of documents, evaluation, tariff determination and issuance of Letters of Support (LoS) by the PPIB.

Moreover, the time for financial closing has also been reduced from 18 months to six months to benefit the sponsors of the new projects by lowering mark-ups on their loans.

The minister said that commitment earlier provided to the private sector investors pertaining to the processing of the project will be fully honoured and the ministry would take up gas availability, regulatory and other issues with the relevant ministries. If the problems were still not resolved it would be referred to the prime minister.

The meeting recognised the importance of developing indigenous coal resources and decided to extend the last date for the submission of pre-qualification documents for 450-mw coal-fired power project at Lakhra from October 31 to December 31, 2004.

The board also approved issuance of Letter of Interest (LoI) for setting up of a 150-mw project near Rawalpindi to Attock Oil Group.

The minister stressed the need for further improvement in the regulations and procedures of National Electric Power Regulatory Authority (Nepra) and PPIB to enhance the investors' confidence and expedite the implementation of private power projects in the country.

The meeting was informed that LoIs have been issued to 11 power projects of 2,696-mw based on gas, hydel and coal which are expected to be completed between 2007 and 2012 and meet future energy requirements of the country.

The meeting also considered proposal for fast track development of power projects including one each at Hawksbay and Gadani, but deferred any decision till next board meeting.