ISLAMABAD, Dec 10: Pakistan has decided to start next month the international competitive bidding (ICB) for the setting up of three thermal power projects with a total capacity of 1,400 mw to overcome increasing power shortages in Punjab and Balochistan.

The projects are expected to attract around $1.4 billion foreign direct investment in the country's power sector that had brought in more than $3 billion in the early 1990s. These projects will become commercially operational by 2008-09, a senior government official told Dawn.

Water and Power Secretary Ashfaq Mahmood said the prime minister had given a go ahead to market the country's power policy and the three projects in London and Dubai from January to July next year.

As such, the Private Power and Infrastructure Board (PPIB) has arranged road shows in Dubai and London in January and February 2005, respectively, to attract investors to the overall power sector and the three projects.

The projects include a 450-mw dual-fired (gas and oil) project at Faisalabad, a 600-mw low BTU (British thermal unit) gas-based project at Uch gas field in Balochistan, and a 350-mw dual-fuel (gas and oil) at Chichuki Malian near Lahore.

The government has estimated that power shortages in the Wapda system would be to the tune of over 1,000 mw by next year, which will increase at a rate of 6-8 per cent every year in view of economic growth.

KESC has also indicated a shortfall of more than 600 mw in its system during the current fiscal year and 1,260 mw by the year 2009-10. This means that the country will be facing an overall power shortage of up to 2,000 mw by next year, sources said.

"So, the PPIB should act proactively in bringing in new investment in the power sector instead of just distributing booklets and investor kits, otherwise the economy would choke very shortly," the sources quoted Prime Minister Shaukat Aziz as saying recently.

The World Bank recently informed the government that "the power sector, which should be a growth driver, is instead choking growth through high operating losses of 1.4 per cent of GDP, shortage, its poor service, high perceived corruption, high industrial tariff and low reliability."

The PPIB has also issued letters of interest (LoIs) to nine local and international consortia to set up over $1 billion worth of nine thermal power projects of 1,045 mw.

These include three LoIs for the setting up of two dual-fuel 300 mw projects by Tapal Group and Fauji Foundation in Karachi and a 200-mw of dual-fuel project by Orient Power in Balloki near Lahore.

Similarly, Fauji Foundation has also been granted LoI to set up a low-BTU gas-based plant at Dharki, Sindh, by using Mari gas which is owned by the foundation itself.

Another LoI has been issued to ETA-Ascon of the UAE to develop a 123-mw low BTU gas-based plant at Jarwar, Sindh. The two projects will be completed by 2008. The Attock Oil group has also been allowed to establish a 150-mw power plant at its Morgah, Rawalpindi premises, using its own fuel.