WHILE the local engineering industry produces machinery and equipment for hydroelectric power plants, local firms lack the ability to construct major power plants on turnkey or engineering, procurement and construction basis. Hence, the country is forced to rely on expensive foreign contracts to get the job done.
Part of the blame can be put on successive governments, who preferred thermal power plants and also provided the local engineering industry incentives to manufacture, as well as import, parts and equipment needed for the construction and maintenance of hydroelectric power plants. As a result, these firms were never truly able to acquire the necessary know-how to construct large power plants on their own.
The Power Policy of 1994 focused on the construction of thermal power, and neglected hydropower projects. Subsequently, in order to promote the latter, the Hydro Power Policy of 1995, and power policies of 1998 and 2002 gave local firms various incentives, in the form of tax concessions and the likes, to import machinery and equipment for hydroelectric power plants.
In the meantime, all contracts for setting up hydropower projects by Wapda and Independent Power Producers (IPPs) were given to foreign contractors on EPC bases.
However, the Power Policy 2002 also proposed that the country develop various power projects, including hydroelectric projects, capable of generating at least 2,000 mega watts (MW) electricity, under joint ventures with foreign companies. This was aimed at helping the local industry to be able to assimilate the requisite technology.However, the effort did not yield the expected results, and the local engineering industry failed to avail the opportunity, at least on a large scale.
Yet, a reasonable engineering and manufacturing base exists in the country, which continues to supply necessary equipment and machinery, and other related technical services to the power sector, and that too at competitive prices. Local firms like the Heavy Mechanical Complex (HMC) , Karachi Shipyard and Engineering Works , DESCON, and Heavy Electrical Complex , among others, have the requisite capability to deliver hydro-mechanical systems (gates, cranes, penstocks, inlet valves, etc.), and hydro electromechanical equipment (turbines, generators, transformers and so on), among a host of other parts and equipments. A number of turbine runners, the most critical component, have been produced for replacement in mini- and small power stations that are operating in the Azad Jammu and Kashmir region (Kundal Shahi), and in Khyber Pakhtunkhwa (Dargai and Kurram Garhi).
Some of these firms are also working on installing smaller hydroelectric power plants. The HMC installed 40 turbo-generators for 23 mini hydropower stations in the Gilgit Baltistan region, in collaboration with Switzerland’s Escher Wyss and the United Kingdom’s Biwater. Some local construction companies, like Habib Rafiq and Al-Tariq Constructors, also have experience in constructing small and medium hydropower plants.
On the other hand, DESCON mostly focuses on project management, site management, erection, installation and commissioning of power plants. Similarly, Nespak is engaged in project designing and management, and conducting feasibility studies for hydropower projects.
Realising the importance of the indigenisation of power plant machinery in resolving power crisis in the long run, the government recently adopted a strategic plan to strengthen HMC with an investment valued at Rs21.54 billion. The project is in the implementation stage right now. The plan is focused on enabling HMC to effectively participate in developing power plants (primarily hydropower), while keeping track of power demand projections made in the National Energy Security Plan 2005-2030.
An important element of strategy is to get HMC to develop smaller hydropower projects on turnkey basis. The Naltar-III hydropower project, with a capacity of 16MW, would be constructed in Gilgit Baltistan at a cost of Rs1.372 billion. The entire project would be financed by the government. HMC and its consultant, Nespak, have already commenced work at the project site.
Foreign consultants have also identified hundreds of other hydropower schemes, which would each provide electricity in the range of 5MW to 50MW, as technically and economically feasible.
Nonetheless, there is still a need for an effective institutional and regulatory framework, that would provide momentum to the indigenisation of production of machinery and equipment for local hydropower generation. Given an enabling environment, the local engineering industry can gear up to undertake power projects on EPC basis, starting with small hydropower plants. This would lead to import substitution, cut capital costs, and reduce power generation costs.
The writer is the chairman of the Institution of the Engineers, Pakistan (Rawalpindi-Islamabad Centre)