ISLAMABAD: A consortium, comprising Power Construction Corporation of China and Qavi Engineers, has been declared the lowest bidder for Rs82 billion power project in Haveli Bahadur Shah of Jhang district.

Authoritative sources said the successful bidder offered the lowest levelised electricity cost of 7.921 cents per unit (kWh).

The project is one of the five Regasified Liquefied Natural Gas (RLNG)-based projects the government has been pursuing under its fast-track power generation programme.

The project is required to begin commercial operations in 20 months as open cycle operation and shift to combined cycle in 30 months after financial close. However, the government wants these plants to be functional by the summer of 2017.

The 1,000-1,200MW combined cycle power project was offered for international bidding by the National Power Parks Management Company Ltd, a subsidiary of the Ministry of Water and Power. The project would use high speed diesel as alternate fuel.

A total of 19 parties had obtained prequalification documents and five of them submitted technical and financial bids.

Turkish ENKA Construction and Industry Co Inc and GE Consortium stood second with 8.134 cents per unit tariff, followed by Harbin Electric of China and Habib Rafique with 8.181 cents per unit.

The Hyndai Engineering of Korea and Descon stood fourth with 8.278 cents per unit levelised tariff while the China Machinery Engineering Co (CMEC) and SEFEC offered 8.280 cents per unit.

The bids were evaluated on the basis levelised electricity cost as a function of energy (kWh) generated, engineering, procurement and construction cost and fuel cost over first 12 years. After technical evaluation, the bids were examined on the basis of financial bids.

This project and the other one at Balloki in Kasur, also of 1,000-1,200MW installed capacity, are being actively pursued to overcome electricity shortfall before 2018 general elections.

The Central Development Working Party (CDWP) had in April approved Rs162.8bn cost for the two power projects (Rs81.4bn for each), without any foreign financial assistance.

The NTDC will invest Rs7.15bn in providing grid connectivity to the two sites. An amount of Rs45bn has been allocated under the current Public Sector Development Programme (PSDP) for the two projects (Rs22.5bn each) while Rs675 million and Rs756m would be spent this year for the 500kV transmission line infrastructure.

The cabinet committee on energy, led by Prime Minister Nawaz Sharif, had decided in February last that Rs180 billion required annually for LNG-based projects would be appropriated from the PSDP as non-lapsable funds, a part of which may be contributed by the provincial government.

The operation and maintenance of the project would be outsourced for ensuring better performance and facilitation of early privatization.

The National Electric Power Regulatory Authority (Nepra) has already approved up to Rs10.55 per unit upfront tariff for 3,600MW of liquefied natural gas (LNG)-based power projects in Punjab for 30 years, assuming the LNG price at $12 per million British thermal units (mmbtu).

The upfront tariff would be subject to change at the time of commercial operation on the basis of foreign exchange rate, customs duties and other charges and insurance cost to a maximum of seven per cent. The tariff promises 15pc Internal Rate of Return (IRR) on equity to investors.

Published in Dawn, August 28th, 2015

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