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ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Thursday cancelled the generation licence for a $600 million coal power plant being built by a Chinese company in Jhelum district.
The generation licence was issued by Nepra to China Machinery Engineering Corporation (CMEC), and the generation tariff was set at Rs8.55 after agreement with CMEC.
The coal powered plant was to have a generating capacity of 330MW.
However, CMEC stated that the tariff Nepra proposed is not agreeable to banks, the coal present in the region is sub-standard and railway infrastructure is not present in the area.
According to Nepra officials, the plan for the coal powered plant has not been shelved after the cancellation of the licence.
The company which is also a key contractor in the $4 billion 969MW Neelum-Jhelum Hydropower Project in Azad Jammu and Kashmir had been lobbying for Rs11.67 to 12.4 per unit tariff that was far higher than upfront tariffs for projects on Thar coal and imported coal. Nepra allowed a 30-year levelised tariff of Rs8.55 per unit.
The project envisaged power generation along with coalmining project in the area of Choa Saden Shah with an average production of about 6,000 tons of local coal per day.
The CMEC had promised to introduce semi-mechanised mining technique for the first time in the region with an investment of $200 million.
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Comments (61) Closed
Sep 08, 2016 10:20pm
Chinese company should have studied all the aspects before bidding for the project. No point in making excuses after winning the contract.
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Sep 08, 2016 10:27pm
So finally loot by Chinese showing off....
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Sep 08, 2016 10:30pm
Cpec will go this way too!
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Sep 08, 2016 10:42pm
Big set back for cpec. The contract should be redone as per 12 rupee per unit. Hail cpec
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Sep 08, 2016 10:56pm
All of CPEC will be scrapped due to pricing...
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Sep 08, 2016 10:58pm
Now we will find out the true cost of Chinese onvestment
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Sep 08, 2016 11:01pm
Rs11.67 to 12.4 per unit??? We're paying 6.50 rs per unit when i cross 500 units. Its 4.30rs for below 500 units in Tamil Nadu/India
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Sep 08, 2016 11:21pm
NEPRA is harming CPEC, 80% of the CPEC investment is supposed come from these Chinese companies and the deal was minimum 18% ROI officially ( unofficially north of 30% ).
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Sep 08, 2016 11:38pm
Too much dependency on China for all kind of technology is not good. China is not even technologically advance country.
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Sep 08, 2016 11:59pm
Its just the beginning ! Consequences of vision less policies and blind faith.
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Sep 09, 2016 12:10am
Chinese are selling power at a cut throat price. Should the Government allow them to exploit the poor consumers?
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Sep 09, 2016 12:33am
All weather friends don't walk away like that. Give them what they want. What is friendship for?
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Sep 09, 2016 12:39am
Chinese companies started showing their true colors.
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Sep 09, 2016 12:40am
The Chinese wont do anything unless they are making a good profit. After all they are not running a charity.
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Sep 09, 2016 12:46am
Absolutely, signs of things to come. The US company Enron did something in Maharashtra State and the consequences were similar. Unrealistically priced energy.
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Sep 09, 2016 01:00am
Looks like NEPRA does not care about the 46 billion $ inv from the all weather friend
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Sep 09, 2016 01:08am
None of the foreign companies will invest until the project is not is not profitable
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Sep 09, 2016 01:12am
A kick in the teeth for Big Brother. Business is business.
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Sep 09, 2016 01:32am
Chinese power plant promise 3000MW and will deliver 300MW. We should be careful with them.
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Sep 09, 2016 01:33am
How could the Chinese company start building the power plant without having an agreeable tariff approved by NEPRA? The whole affair sounds like rental power plants in PPP tenure who received staggering payments as mobilisation advance without having anything on the ground. Well, why not.
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Sep 09, 2016 01:35am
NEPRA did not cancel anything, the company simply excused itself.
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Sep 09, 2016 01:44am
@Mohajir welcome to world of economic reality Pakistan
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Sep 09, 2016 01:55am
Depends on what kind of feasibility studies were done or was it just political agreements.
Exchange rates, coal quality and logistics need to be there to get the right cost. Otherwise it would have ended in later stages. NEPRA cancelling means there was something incorrect in earlier estimates.
Pretty sure any other company from other side of the World would have done the same.
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Sep 09, 2016 02:37am
Its a good thing for Pakistan - coal powered power stations have long term impact on environment and health. Pak should invest in clean and renewable energy.
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Sep 09, 2016 03:05am
I'll get my pop corn and watch this tamasha!! This is gonna be interesting.
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Sep 09, 2016 03:08am
power cut
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Sep 09, 2016 03:28am
How can Chinese companies survive when there is no infrastructure? This is only the beginning.
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Sep 09, 2016 04:10am
Well begun is half done!!
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Sep 09, 2016 05:11am
No issue. They will get back same contract when it is started again in few months. Price will be around Rs. 14-15 with inflation adjustment every year which is around 10-12% every year.
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Sep 09, 2016 05:18am
good move....think about the pollution....nuclear plants is the way forward....they need to consider building them deep underground.....for security reasons.
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Sep 09, 2016 05:41am
Now we know why Government is not releasing the CPEC agreement details!
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Sep 09, 2016 05:55am
So it doesn't work out.. Indians start making hay out of it.. Word of advice.. This is not the end of it.. We will still collaborate to ensure that we remain a thorn in your side.. And the contract will be re-negotiated..
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Sep 09, 2016 06:04am
Didn't same company bowed out of the project few weeks back?
http://www.dawn.com/news/1259048/chinese-firm-bows-out-of-coal-based-power-project
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Sep 09, 2016 06:40am
Surely the tariff will be cheaper than the oil based Power plants. Let us not allow our internal enemies to succeed. We should think of a win win situation for further strengthening our friendship with China.
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Sep 09, 2016 06:57am
Do not compromise on quality.
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Sep 09, 2016 07:31am
Chinese know how to exploit weak economies.what they are doing in Africa and just recently in SriLanka is known to all.Never allow them to take 100%ownership better to have JV with local companies as in India they do.
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Sep 09, 2016 07:33am
As a power sector senior professional in India, I consider Rs 8.55 itself PROHIBITIVELY HIGH tariff which works out to Rs 5.5 IRs. Even if say a low PLF of 70% and a discounting rate of 10% is considered, fixed cost should not exceed Rs 2 for 330 MW size. And fuel cost considering a station Heat rate heat rate in the region of 2600 ( 30 year average) should yield a levellised fuel tariff not exceeding IRs 2., taking total to max IRs 4 or PkRs 6.5.....................So 8.55 is a COOL LOOOOT !
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Sep 09, 2016 07:40am
What is the fuss give them what they want. They are building CPEC
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Sep 09, 2016 07:41am
Chinese companies are well known for making deal, but its too much in this case. Chinese companies are using Pakistani resources like coal/land/water and they give electricity at very expensive rate.
In India we have Rs5-6 per unit, India is ready to export at the same rate.
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Sep 09, 2016 07:42am
Just posturing. It will go through once the politicians get involved.
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Sep 09, 2016 07:57am
Don't do it if it's not feasible ......economics trumps even trump
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Sep 09, 2016 08:05am
Ignorance and lack of knowledge at its peak!!!
"Give them what they want?" Seriously? ?
Agree!! china is investing billions of dollar but that doesn't mean we have to accept everything there way!
Investment doesn't mean slavery! We have our terms they have there and that's the way sovereign states work..
Higher cost mean higher bills, higher bills mean high increments in each person monthly salary and at the end we will be where we are standing today!
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Sep 09, 2016 08:28am
I am not sure what are charges for domestic power supply in Pakistan.
I pay 3.5 per unit..Power supply is about 22 to 23 hours
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Sep 09, 2016 08:37am
@Madras their rupee is smaller than us. Approx twice as less
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Sep 09, 2016 08:36am
1st os all law nd order safety security of foreign company nd their employees extreme poor not only but rulers are not taking action . On organisations. Openly delivering hate speech . Rulers indirect allows them . Sir how. Foregn co . Vl come nd invest . Except china. No good relation with neighbouring, war mania, see the past record,who started nd what result .
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Sep 09, 2016 08:40am
@Madras Your calculation is wrong. The price mentioned is Pakistan rupees not Indian rupees.
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Sep 09, 2016 08:47am
Money has No value before friendship. In China we must trust!
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Sep 09, 2016 08:51am
Chinese must subsidies the rates. Their cost will reduce when infrastructure improves. They shouldn't think profit from day one. This way cpec can't complete.
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Sep 09, 2016 08:59am
Rust covering the IRON relationship.!
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Sep 09, 2016 09:07am
@Sachin Still Pak rupee is 1.5 times of India. On avg. Indians pay around INR 5/unit which is about 7.5 PKR. Even if we add extra 2.5 that will be max 10 PKR.
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Sep 09, 2016 09:10am
@Kulbhushan Yadav
Yes, you are correct. However, Nepra did not take any action in regard to license when Chinese company walked out some time in May this year. It cancelled the license today which marks dissociation of the Chinese company from the project official.
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Sep 09, 2016 09:27am
It is generally assumed that additional power generation will accelerate Pakistans Industrial growth.In this illusional fervour what is overlooked is the critical role that the cost of electricity plays in delevering a compet etive product.While horrors ike Nandipur may not repeat, remember that even hydro electric proj ects, eg Neelun Jhelum will deliver very costly power simply due to unending delays and cost over runs.
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Sep 09, 2016 09:29am
@Sachin It is still more, here in India it 4-5 rs i.e 8-10 Pakistani rs. I am living in Bangalore my monthly bill is 1000 rs with 24x7 power supply in gov quarters.
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Sep 09, 2016 09:31am
@Ricky This is how the Chines do bussiness ask Srilankans!!
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Sep 09, 2016 09:37am
Chinese know Pakistan has no choice ,So they will squeeze the most ounce of milk they can.
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Sep 09, 2016 09:50am
True friendship will prevail..
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Sep 09, 2016 09:55am
It would be cheaper, efficient and ideal to buy electricity from India ,rather than get fleeced by the Chinese.India ,Pakistan have river agreements ,since it cannot be avoided. So Electricity can also be considered as an unavoidable purchase and Paksitan can reciprocate with transit rights ,which will additionally indemnify the electrical purchase.
With many private parties in India willing to sell at much lower costs ,security will also not be compromised.
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Sep 09, 2016 09:56am
As per Wikipedia total installed capacity in Pakistan(as on 2014) is 22kMW and fossil fuel based Thermal plant capacity is a minimal 14,635 MW. India in a year is installing more capacity than this.
The major reason are
.1) The vision of Indian politicians(with honourable mention to Nehru) in establishing India companies to cater the need of a starving country (BHEL, NTPC etc)
2) Giving more emphasis to education.
Now the South Asian countries should join hands to tackle these problems. India public sector countries are working in Afganistan and Bnagladesh. Technical superiority of one country can create jobs in another country. Pakistan too can take benefit of it. And trust me, Indian power plant sets are better than that of a Chinese sets.
Thanks
PS: I have experience of project management of six sets of 600MW and currently looking after a 800MW super-critical project.
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Sep 09, 2016 10:29am
If the rulers could have maintain good relation with India keeping their differences aside for few yrs, Indian industrialist have given more effective power plant and development infrastructure. More jobs. Trasaction in rupees. Indians hin dustanis are most liberal community in the world. They all are welcome . Extremism ND immature leadership have isolated country . Now see the record of last 2 yrs . ModiJi leadership making progress ND on otherside going down ND down in all sector . It is up to reader to accept the fact . Indians are working all over world and mix with local people and always development country . India shining .
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Sep 09, 2016 05:32pm
@OSD itv i s just the beginning of the end
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Sep 10, 2016 05:57am
I shall request the prime minister not to cancel the licence of company and instead increase the tariff as their demand is genuine this will pave the way for local coal mining and development and further the chinese company who is to suffer losses will not be at loss .
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