ISLAMABAD: The 300MW coal power project in Gwadar remains stalled as the Chinese firm CHIC Pak Power Company (Private) Limited awaits an upward revision of the project’s tariff by Nepra.
The company is unwilling to proceed without adjustments to the tariff and has asked for waivers on extension fees and changes to guarantee requirements, Business Recorder reported, citing sources.
The company’s CEO wrote to the Private Power and Infrastructure Board (PPIB), stating that they had complied with all requirements after receiving the Letter of Support (LoS). The performance guarantee linked to the LoS was extended to March 31, 2025, at a cost of approximately $1 million in extension fees.
The LoS expired on December 31, 2024, and the company has requested an extension without paying the usual $150,000 fee.
The CEO emphasized the importance of the project for Gwadar’s development, citing its role in supporting economic growth, port infrastructure, and local livelihoods. Despite challenges, the company has invested $22 million in development costs and initiated construction twice at PPIB’s request.
The company has also maintained a presence in Islamabad and Gwadar for seven years, working toward project completion.
According to sources, the company has filed five petitions with Nepra to revise the tariff, which was approved in May 2024. However, the current tariff structure has made the project financially unviable.
While Nepra increased the energy tariff and adjusted costs based on market rates, it reduced the internal rate of return and fixed O&M costs, creating financial strain for the company.
The firm also criticized Nepra’s profit-sharing mechanism, which does not account for losses, and additional requirements that impose significant costs beyond its financial capacity. Security expenses in Gwadar, along with the higher costs of smaller coal projects, have added to the burden.
The company stated that these challenges, combined with unfriendly requirements, have made it difficult to proceed under the current terms.
The CEO expressed frustration over the lack of progress and called for Nepra to objectively and fairly approve the tariff. The company pledged to submit an implementation schedule and mobilize resources promptly once the tariff is revised, ensuring financial closure and commercial operation with the support of both governments.
