Overriding ban on imported fuel power plants, federal govt grants waiver to Punjab

Islamabad: The federal government has flouted its own ban of setting up power plants on imported fuel, as it has allowed Punjab to commission a 1263-megawatt project on imported LNG.

Despite making tall claims of loadshedding coming to an end this November, the government has gone ahead and given Punjab permission for setting up this 1,263MW power project, which will hamper already depleting foreign reserves due to guaranteed payments to investors.

Offering clarification, Power Secretary Yousaf Naseem Khokhar said the federal government hadn’t committed anything wrong and the waiver was given by the Cabinet Committee on Energy, while talking to a local newspaper.

Reason for enforcement the ban on setting up imported fuel-based power plants was carried out considering power divisions estimates that it costs $500m annually to run a 1,300MW power plant. It was also carried out to control the outflow of foreign currency, which would have resulted in the lowering of the import bill, considering imports are almost two times more than the exports.

Punjab government has also been successful in reviving previously cancelled Rahim Yar Khan power project, which was originally a part of China-Pakistan Economic Corridor (CPEC). This project is still in its infancy stages and is being sponsored by Nishat Group.

According to documents from the Cabinet meeting held on 26th September, power secretary informed that the country is expected to have surplus power supply from November 2017 till September 2018 and no loadshedding will be carried out except in high loss areas.

Khokhar added that 11,514MW will be added to the system and refrained from making any firm statement regarding its availability. He said he awaited the results of a NTDC survey regarding the availability of surplus electricity, which will be known within the next few weeks.

Doubts are being raised over the availability of this surplus electricity and why were these projects executed considering under existing policy, power plant producers are entitled to get idle capacity payments, if the govt doesn’t purchase despite it being online.

Officials said these new power plants could add 50 paisa per unit into the existing power tariff which is currently being determined by Nepra.

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