ISLAMABAD: In what appeared to be a policy change, the government has decided to set up a new 1,200MW power plant based on imported re-gasified liquefied natural gas (RLNG) on a fast-track basis to cover slippages on the target to end loadshedding by 2018.

In July this year, the government had banned fresh private sector investments in power generation on imported fuels, saying it had contracted surplus capacities enough to meet electricity demand beyond 2022.

Soon it dawned on the government that a few projects, which could ensure a ‘loadshedding-free Pakistan’ before the next elections, could miss the dadline and hence an exception was given for a ‘contingency project’, a senior government official told Dawn.

The PML-N had come to power on the promise of ending power shortages in the country within its five-year term.

On Friday, a hurriedly called meeting of the board of directors of the Private Power and Infrastructure Board (PPIB), headed by Water and Power Minister Khawaja Asif, decided to invite bids for the 1,200MW RLNG-based power plant in Muzaffargarh, Punjab, an official statement said.

Another official said that three key members of the board — secretary water and power, chairman of Wapda and chief secretary of Balochistan — did not attend the meeting due to short notice and conflicting engagements.

Interestingly, a host of unauthorised senior executives of the PPIB attended the whole board meeting, although rules allow that only members of the board or their authorised nominees could attend board meetings, he said.

He said the 1,450MW Tarbela 4th Extension had been delayed beyond its completion deadline but was within the 2018 target timeline, while the strategic 969MW Neelum-Jhelum hydropower project could still not be relied upon because of its challenging geographic and hydrologic nature.

The official said the Cabinet Committee on Energy (CCoE) headed by Prime Minister Nawaz Sharif had deliberated upon the issue and wanted to ensure without any doubt that enough project capacity was available before the next elections to end even slightest of shortfall. “There are still 16 months to go and much can change. Hence, the prime minister is not ready to take chances,” he said, adding that a major plant supplier, General Electric, was already missing some deadlines.

Official sources said that the new project would be offered for bidding under a tight schedule so that it could start single-cycle production before March 2018. “We will not sign this project if it is not available within this time constraint.”

When contacted, Secretary Water and Power Younas Dagha said the “capping on new plants based on imported fuel” was still intact and would remain so but one exception was approved as contingency plan. He said the government was trying to complete about 10,000MW of power generation capacity in about a year.

An official statement said the ministry was directed by the CCoE to initiate the process of advertisement through the PPIB for inviting prospective investors for installation of the combined cycle power plant of 1,200MW based on RLNG to address the power shortfall challenges.

The meeting was informed that the project would be located in Muzaffargarh, near the existing thermal power station, having gas turbines based on combined cycle technology. The power plant will have minimum annual availability of 92 per cent. “Open Cycle Operation is scheduled to start by February, 2018, whereas the full Combined Cycle Operation will start by the end of 2018,” the statement said. The bids will be invited in a few days through single stage, two envelope bidding approach.

The power ministry had issued written instructions in July after 105th meeting of the PPIB board not to extend expiring letters of intent (LoIs) and letters of support (LoSs) for existing proposals or issue new ones for power plants of imported fuel.

“No LoI or LoS be issued or extended by the PPIB for any power plant on imported fuel except agreed bilaterally by the government of Pakistan with the Chinese government and are part of the priority list of China-Pakistan Economic Corridor projects,” read the order of the power ministry.

The order said the power generation capping plan approved by the PPIB board was based on a presentation that already contracted power projects that were enough not only to meet power shortages but also provide reasonable surplus reserve.

It said that 2,632 megawatts of new hydropower plants and 3960MW of coal-based power plants (both local and imported) and other renewable energy projects already under construction would bring in 13,207MW of new generation capacity by the end of 2018. This is “sufficient not only to meet our power shortages, but also to provide comfortable spinning reserves”.

The order said it was also observed that the “power generation already financed and under various stages of execution will also bring further capacity of 20,380MW by 2022, bringing the total installed capacity to 53,405MW”.

On the basis of these commitments, “it was decided that no further financial commitments would be justified for purchasing power from the private sector, especially on imported fuels”, the order said.

Published in Dawn October 29th, 2016