WB paints gloomy picture of Pakistan power sector: The News

By Ansar Abbasi

ISLAMABAD: The World Bank presents an extremely gloomy picture of Pakistan’s power sector that is marred by corruption and inefficiency but sells electricity to the public for a price that is 60 per cent higher than that of India and 40 per cent more than that of Bangladesh.

A draft report on “Pakistan’s Investment Climate” issued in March this year by the World Bank reveals that Pakistan has become the worst performer in the world after Egypt in respect to the waiting period for a new connection. Regarding massive corruption in the provision of electricity connections, the report disclosed: “A stunning 84 per cent of firms that applied for connection had to make informal payments in order to obtain electricity services.”

The governmentís claims and the ever-increasing loadshedding apart, the Bank says with only about 65 per cent of Pakistan’s population having access to grid-connected electricity, poor access to power has assumed serious dimensions, justifying firm perceptions that electricity is the most important impediment to growth.

Instead of taking remedial measures and keeping its own house in order, the National Electric Power Regulatory Authority (Nepra) is poised to hit the consumers with another increase. The decision has, however, been put on hold following the Supreme Court’s intervention. The court seeks review of the decision, which, according to a source, the Nepra had taken without following the laid-down procedures for tariff determination.

The WB draft report presents a sorry picture of power sector reforms and the inadequacy of regulation in enforcing efficiency by the Nepra despite being in formal existence since 1997. The Nepra law required a regulatory framework of which 90 per cent has not been put in place by it despite the Nepra law stipulation to issue these rules within 18 months.

Some interesting portions of the World Bank report are reproduced as below:

Electricity price: The price of electricity is on the higher side relative to other South Asian countries. Even with the subsidies, system losses and supply quality problems, electricity tariffs in Pakistan are 60 per cent higher than in India and about 40 per cent higher than in Bangladesh.

Losses: Technical and collection losses impose a severe strain on the financial sustainability of Pakistan’s power sector. The country’s electricity system loses more power than all comparators, apart from India, which lost a quarter of its generated electricity in 2006/07.

Access to power: Access to power supply is a serious challenge for firms although the pattern differs across location, type and size.

Delays in getting electricity connections have become worse for firms and this barrier to entry and constraint on expansion. The waiting period for a new connection went up to from around 37 to 41 days from 1999-2002. The average waiting period in 2006 deteriorated to 92 days, placing Pakistan among the worst performers in the world, second only to Egypt amongst its comparators.

Corruption in the electricity sector: In addition to technical issues, other factors impede low-cost access to power supply. A stunning 84 per cent of the firms that applied for connection had to make informal payments in order to obtain electricity services — a startling increase from the 25 per cent firms that reported making such payments in 2002.

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‘Pakistan to add 20,000MW in 10 years’: The News

Friday, November 14, 2008
By our correspondent

LAHORE: Pakistan is likely to add 20,000MW hydro-electricity generation capacities in next 10 years that besides mitigating power shortage would have sobering effect on the average cost of electricity generation.Water and Power Development Authority (WAPDA) Chairman, Shakeel Ahmad Durrani stated this during an interview with The News. He said the major hydro-electric generation would come from Dialmer Basha Dam that would produce 4500 MW electricity, the construction of which would start by second quarter next year. He said earlier, WAPDA was concentrating on mega dams only that served the dual purpose of providing water for irrigation and generating electricity. He said now it has been decided to explore all avenues from where the hydro-electric generation is possible.He said Bunji a run of the river project would produce 5400MW electricity. Engineering of this project has been completed and its tenders would be invited in early 2010. This project would be completed in seven years and its cost is $6 billion. The project would be built on River Indus near Gilgit, he added.He said Dasu is another run of the river electricity generation project, located 2km upstream on Indus River 69km downstream of Diamer Basha dam. He said feasibility study of the project would be completed within this year. He said tentative project cost is $6.5 billion. The project he added should be completed within a decade as its implementation period is estimated to be 7 years.

For more on this article, please click on the following link: ‘Pakistan to add 20,000MW in 10 years’: The News

Chinese firm to construct 1,100MW power project: The News

Friday, October 10, 2008By our correspondent

ISLAMABAD: In a positive development, Sinohydro Corporation of China is to invest in 1,100MW Kohala hydropower project.Top officials of the company came up with the offer on Thursday in a meeting with the Federal Minister for Water and Power, Raja Pervez Ashraf. The minister said that government would facilitate foreign investors to invest in the water and power sector in Pakistan as there are great opportunities. He said that foreign investment in hydel power generation would help to meet the country’s future power requirements at affordable prices.Ashraf also informed the delegation that Pakistan was embarking on the construction of multipurpose dams which would meet power needs in the long term. Earlier, the Chinese company gave a detailed presentation to the minister on its ongoing projects and briefed him on the expertise in construction of hydropower projects. The firm expressed interest in investing millions of dollars in Pakistan by constructing 1,100MW Kohala hydropower project.They also informed that the company is working on 156 hydropower projects in various countries of the world. The company is already constructing Gomal Zam dam, Khan Khawar hydropower project and Dubair Khawar hydropower project in Pakistan.

For more on this article, please click on the following link: Chinese firm to construct 1,100MW power project: The News

China to fully finance Diamer Bhasha dam in Pakistan: Daily.pk

In a major development regarding the construction of Diamer Bhasha dam, China has agreed to completely finance the $8.5 billion project, sources in Water and Power Development Authority (WAPDA) told on Thursday. 

German Company Lemhyer has issued final draft of the dam in which the company has projected the cost of dam at $8.5 billion against the earlier projected cost of $6.5 billion in the year 2005. Government wants to start the construction work on Bhasha dam in the year 2009, sources added. 

Pakistan has turned to China regarding the financing of the project after World Bank refused to add the project in the $1.4 billion aid for current financial year 2008-09. They further said that World Bank lending rates are higher and China would provide loan on lower rates. Pakistan had submitted the draft of detailed engineering design of the dam and in response China has agreed to provide financing for the said project. Sources informed that China has also great expertise in the working on big dams and it has expert labour force and machinery for such purposes. 

Chinese government has offered Pakistan to provide skilled labour for the construction of the Bhasha dam as it has 17,000 skilled labourers who have worked on three Gorges Dams in china, which are generating 30,000MW electricity. They said that China has also assured that it would hire a company to provide financing to Pakistan for the construction of the dam. Earlier, Pakistan was looking at Asian Development Bank (ADB) and World Bank.

For more on this article, please click on the following link: China to fully finance Diamer Bhasha dam in Pakistan: Daily.pk

Work on most hydropower projects to start next year: The News

Friday, July 04, 2008
By our correspondent

LAHORE: The Water and Power Development Authority is striving for optimal exploitation of hydropower potential to cope with increasing demand of electricity in the country.

WAPDA Chairman Shakil Durrani stated this during a visit to project sites of Diamer-Basha dam, Dasu, Pattan and on-going three high-head hydropower projects namely Khan, Allai and Dubair Khwar on Thursday.

According to a statement issued here, the WAPDA chairman said nature had blessed Pakistan with the potential of generating more than 54,000 megawatts of hydel electricity.

With a view to injecting low-cost electricity into the national grid, WAPDA was working on feasibility studies and detailed engineering designs of a number of hydropower projects with accumulative capacity of about 25,000MW including Kohala (1,100MW), Bunji (5,400MW) and Dasu (4,000MW), he added.

For more on this article, please click on the following link: Work on most hydropower projects to start next year: The News