Port Qasim Plant to provide cheapest electricity among all CPEC projects

KARACHI: Port Qasim Coal-Fired Power Plant has become the cheapest power generation unit among all power plants installed under the game-changing China-Pakistan Economic Corridor (CPEC) as the plant would produce electricity at 8.36 cents per unit.

Cheapest power is a symphony to the ears of millions of Pakistani electricity consumers who have been suffering due to high billing over the years from the Independent Power Producer (IPPs) units installed back in the 1990s to the Rental Power Projects (RPPs) installed under the past regime of Pakistan Peoples’ Party (PPP), power generation costs have been rising significantly.

In an exclusive interview with Pakistan Today, PowerChina Resources Limited Chairman Sheng Yuming revealed that Port Qasim Power Plant is a gift from the Chinese government to the people of Pakistan to help materialise the dream of cheap electricity.

“When Prime Minister Li Keqiang visited Pakistan in the year 2013, power shortage was at its peak. So, he directed PowerChina to help Pakistani people mitigate this challenge. This was the spirit that led to the Port Qasim Power Project,” said Sheng Yuming.

“We knew power plants in Pakistan are mostly oil and gas based which generate costly power. These plants also did not acquire modern technology and each unit generated through oil and gas plants normally cost 13 to 16 cents which are expensive power. On the contrary, power generated by Port Qasim Power Plant would be around 8.36 cents per unit which is far cheaper than other plants in the country. Now Port Qasim Coal-Fired Power Plant is not only producing cheap but also environment-friendly electricity through supercritical technology for the people of Pakistan,” he added.

He said that while the chimney of Port Qasim Power Plant is releasing mere steam with zero-emissions. The chimneys of the nearby Power Plant are releasing black smoke which is hazardous to human life by adding to the air pollution here in Karachi.

“First unit of Port Qasim Plant is now producing 660 megawatts. Since November 15, Port Qasim Power Plant has added 270 million kilowatt hours to the national grid. Each day of full-out operation for each unit, this plant would add 15 million kilowatt hours of cheap energy and clean energy,” he added.

Sheng said that PowerChina also did not use any available land in Karachi port. “Rather, we decided to recover the land under seawater by investing heavily to reclaim this land for the construction of the plant, in reality, we did not want to bother the people Karachi. The second unit of the plant would commence operations exactly after 45 days from now, in February 2018,” he added.

He said PowerChina aimed at providing Pakistan government and its peoples with affordable, cleaner and sustainable energy and this project is the first ever large-scale imported coal-fired power project under the CPEC.

He said China’s top leadership has pointed out that in development path of CPEC and Belt & Road initiative, we must let the host country or government to have a sense of acquisition and fulfilment.

“We spent more than one-year time to discuss and negotiate, including the new power policies, the agreement framework, etc. and finally, we have reached consensus and agreement in the guidelines of implementing such an agreement. All this work is to ensure that the project can be implemented under a feasible, bankable and risk-controlled manner so that the project can also be implemented on a fast-track basis,” he maintained.

The PowerChina chief said Port Qasim Coal Plant would play a prime model to attract more investors’ confidence in Pakistan. “PowerChina is the world’s leading energy and infrastructure developer and constructor, so we have a unique competitive advantage on whole industrial chain service from designing, planning, construction to the operations,” he added.

Hence, he said, PowerChina provides a complete solution to all these aspects in terms of energy and structure development. Together with other responsible state-owned enterprises in China, PowerChina has paved a way for other businesses and investment in Pakistan, he added.

“The Port Qasim project just clearly exemplifies our unique competitiveness, the whole industrial chain serviceability. Since this project’s first unit is synchronized with the national grid, one can see that a substantial amount of energy has already been produced and transmitted to other parts of Pakistan. We are very happy to see that the power shortage has largely been addressed or resolved through the successful implementation of this project as well as other projects,” he explained.

Asked about new projects PowerChina is going to undertake in the future, Chairman Sheng Yuming said following the successful Port Qasim project, PowerChina would like to undertake some hydropower projects in Pakistan including Taunsa Hydropower Project near Multan.

“It would be a medium-size project with a capacity of 135 megawatts. The project is at the prequalification stage and we are expecting this project to be awarded to us. This is also a BOT (Build-Operate-Transfer) project. PowerChina has been involved in various projects in Pakistan over the past 30 years,” he added.

Asked how much Chinese and Pakistani labour had been employed at the project, CEO Port Qasim Project Cai Bin said PowerChina has over 3,000 Chinese engineers and technicians working on various projects in Pakistan.

“We have also employed over 17,000 Pakistani staff overall working together with us. Moreover, PowerChina last year hired 102 young Pakistani engineers and sent them to China for skill building and training,” he said.

He said those 102 engineers were shortlisted from 16,000 students from various technical colleges and universities from all over Pakistan who had graduated in mechanical and electrical subjects. Now they have returned and are working on this project together with their Chinese counterparts, he added.

“In the future for this power plant, we are planning for a half and half – half Chinese staff and half Pakistani. The number is around 400 staff, maybe in the future, we can hire more Pakistanis. After five years, there would be two Chinese against eight Pakistanis and hence more and more Pakistanis people would be working for this power plant,” he explained.

Asked whether the PowerChina management was satisfied with the security provided to the Chinese staff working on this project, Chairman Sheng Yuming said he would like to say thanks to the Pakistani government for providing excellent security and protection to the Chinese, especially for this power plant.

“Around 645 security personnel are working round the clock to provide security for us,” he added.

Detailing the environment-friendly measures adopted by Port Qasim Plant management, Chairman Sheng said his company had invested heavily to ensure zero-emission rate from the plant.

“You can see at our power plant, we put all the facilities for emission-pollution control. We put ESP to control all the dust. We put sulphur dioxide system to control the de-forestation and SO-2. We adopted the recycled use of seawater to ensure zero discharge. So, we can protect the environment,” he said and added that the chimneys of Port Qasim Plant are emitting only steam and all the dust and other particles are controlled before emission of the steam. In addition to the cooling towers which ensure the protection of the environment, he added.

“We are also using imported coal which enjoys relatively competitive tariff as compared to other projects like oil and gas which are very old models. More importantly, coal-fired plant improves the energy mix in Pakistan. The coal-fired plant can also ensure supply of sustainable and reliable energy unlike the renewable energy through solar, wind or even hydropower,” he said.

Sometimes, Chairman Sheng said, other plants depend on weather and water amount but energy through coal plant is very stable and it can act as the foundation or base for the energy mix.

Asked about Pakistan’s lingering issue of circular debt, Sheng Yuming said other than security challenge, the circular debt is a very serious issue.

“We have also conducted a deep investigation into the matter. We took one year to finalize our deal so we must solve such issues. For this issue, we are relying on the Chinese government. We also invited Sinosure (China’s Insurance Company) for the provision of guarantee in this matter,” he maintained.

He said Sinosure provides guarantees to the Chinese companies working on all the 40 CPEC projects. “We know there are risks involved but since China and Pakistan are friendly countries, we hope such issues do not affect this brotherhood,” he said.

He said Port Qasim Power Plant has not added to the huge foreign debt confronting Pakistan.

“We have brought funding, modern technology and equipment to Pakistan in a very short time and the development of the plant was achieved within a very short time frame. Since Port Qasim Power Plant is purely an investment, this investment would not add to the burden of foreign debt already hurting Pakistan,” he clarified.

He said that the plant has a project-based financing, so Pakistan government has not to worry about success or failure of the project.

“We are also providing jobs to the locals and over 4000 direct and thousands of indirect jobs to Pakistanis. The local and central governments would also be generating large sums in revenue and taxes as this project would generate around $ 117 million,” he concluded.