The government is all set to conduct the groundbreaking of Gadani mega power project, of a cumulative capacity of 6,600MW, in March next year.

The project is being implemented on a fast-track basis, and significant progress has been made within a couple of months.

The Pakistan Power Park Management Company, wholly owned by the federal government, has been incorporated for developing the power corridor. Seed money of Rs1 billion has been allocated to the company, of which Rs100 million has already been released under the Public Sector Development Programme.

The Balochistan government has provided 5,000 acres of land in the Gadani coastal area, in Hub district, as its equity in the project. Preparation of the feasibility report (PC-II) is being undertaken, as required, to seek the project’s approval from the Executive Committee of the National Economic Council (Ecnec).

The Pakistan Power Park, on completion, will house 10 imported coal-based power plants, each of 660MW installed capacity, at an estimated cost of $15 billion.

In the first phase, the Genco Holding Company Limited would install two power plants, in parallel, for which the Expression of Interest for appointment of consultants was invited recently. The selected consultants will carry out feasibility and environmental studies; prepare tender documents; assist in the EPC award; review design/engineering, and supervise construction.

Financing for these two projects will be arranged by the federal government. The 1,320-MW power generation facility is scheduled for commissioning in 2017.

The remaining eight power plants will be established in the second phase as different independent power producers (IPPs), to be selected by the Private Power and Infrastructure Board (PPIB) through an international competitive bidding process.

China has already indicated its willingness to develop two projects of the series on build, operate, own and transfer (BOOT) basis.

A Qatari investor has agreed to jointly finance with the Pakistani government a power plant that would be supplied, commissioned and operated by a Chinese company. A 7-km long dedicated port terminal/jetty for bulk import of coal, along with a coal storage area, will be developed under a public-private partnership mode.

A comprehensive master plan is being chalked out. Common facilities to cater to the needs of all the 10 proposed power plants in the Park include switchyard, ash pond and disposal, cooling water supply and discharge, roads and bridges, sewage treatment and discharge, and housing facilities.

The Pakistan Power Park Management Company will construct the common facilities, whereas the construction of the transmission infrastructure will be responsibility of the National Transmission and Distribution Company (NTDC).

The area is already connected to the national power grid at Jamshoro, but the current system has to be enhanced and strengthened, in phases, to cater to the dispersal of power from the Gadani power corridor.

Plots of land will be sub-leased to private domestic and foreign investors for development of the respective IPPs. Provision of electricity during the construction of the jetty and power plants will be made by the newly-formed management company to facilitate the investors.

In the latest development, two new imported coal-fired power plants, each of 660 MW, proposed for Jamshoro, are likely to be re-located to Gadani.

Donor agencies have already agreed to finance the two projects, and a lot of preliminary work has been done by Genco. The Asian Development Bank (ADB) will provide $900 million; Exim Bank China $480 million, and the Japan International Cooperation Agency (Jica) $400 million. Pakistan will have 30 per cent equity.

Shifting the projects from Jamshoro to Gadani will help expedite implementation of different phases of the project.

There are promising chances for getting the Power Park project financed by international financing institutions. The World Bank, which now allows new coal-fired projects only in developing countries, is being approached by the government. The ADB is also willing to fund the new coal-based power projects. The Islamic Development Bank has agreed to provide an additional $850 million for power projects, including the Power Park, to be disbursed in the next three years.

But all these donor agencies will require a detailed bankable feasibility study and the Environmental Impact Assessment (EIA) report before making any commitment.

It has been decided that clean coal technology of supercritical coal-fired boiler will be employed, ensuring strict compliance with national environmental laws by adopting mitigation measures.

However, the fact is that advanced coal combustion technologies like ultra-supercritical and integrated gasification combined cycle have been developed to achieve higher plant efficiencies and reducing emissions of ash, sulphur and heavy metals.

The latest coal combustion technology, known as Carbon Capture and Storage (CCS), is proven to result in almost zero emission of pollutants. But the government will have no means to control private investors from employing the advanced technologies, notwithstanding the increased power generation cost in such a case.

There is a need to develop mega power plants in the backdrop of the prevailing power shortfall and studies that coal becomes feasible at higher economy scale. But the government should address the possible risks and challenges of the project before its launching.

The 6,600MW power generation facilities will require import, storage, handling and use of 44 million tonnes of coal annually, or about 122,000 tonnes per day, or over 5,000 tonnes per hour. Coal combustion will generate approx. 16,500 tonnes of sulphur dioxide and 30,000 tonnes of nitrogen oxide annually, while particulate matter emissions will be 4,600 tonnes per year, depending on the quality and the characteristics of the coal that is used. About 80,000 acre-feet water will be required annually for cooling purposes.

The government should also learn from the failed experiences of undertaking similar coal-fired power projects in the country, with a view to remove problems, constraints and irritants.

In 2006, the AES Corporation (USA) and Mitsui and Co (Japan) had planned to construct imported coal-based power plants at Gadani of 1,000-1,200MW capacity each.

While the bankable feasibility studies for the jetty and the power plants were completed and the investors were in the process of finalising the EPC contracts in 2008, the projects were shelved or cancelled.

Likewise, another 1,000-1,200MW imported coal-based power project, to be located near Karachi, was offered to private investors. But the project, which was launched under the 2002 Power Generation Policy, could not see the light of day.

Engr Hussain Ahmad Siddiqui is a former chairman of the State Engineering Corporation