Reviving Nandipur power project

A symbol of energy activism

With its requirement increasing by eight to 10 per cent every year, Pakistan is facing acute energy crisis for the last many years. Due to adoption of insufficient steps to meet this widening gap, the big gap between demand and supply has always been increasing especially during the summer season. In fact, insufficient supply of electricity has become the major stumbling block in attaining economic self-sufficiency for the successive governments. The previous regime’s lack of investment in energy sector further aggravated the dwindling situation due to its institutional ineptness, political shortsightedness, fast depletion of gas reserves and poor planning in fair distribution of energy resources among the federating units, especially the Punjab.

When the PML-N came into power in the centre this year, the already worsened energy crisis was the major concern. Punjab was facing acute energy shortage for the last five years and this energy-deficiency resulted in closing of a large number of industrial units, massive unemployment and revenue shortfalls. Investment in the power sector was almost zero and big industrialists had already moved out to Bangladesh to save their future.

This was a big challenge as Pakistan’s industrial sector was looking towards PML-N leadership optimistically for the composite overhaul of energy sector.

One of the important steps taken by PML-N government was formulation of much-needed National Energy Policy 2013-18 to support current and future energy needs of the country by ensuring maximum invest through public-private partnership.

The energy policy is comprised of seven main points, with a vision that, “Pakistan will build a profitable, bankable and investment-friendly power sector that would meet the needs of its population and boosts its economy in a sustainable and affordable manner while adhering to the most-efficient generation, transmission and distribution standards.”

This energy policy seems ambitious and could help in reducing load-shedding by increasing power generation through private investors. But it needs proper implementation and harnessing full potential of both public and private sectors so that it may not get entangled in unnecessary bureaucratic snafus.

The Punjab government seems to have taken the lead in power generation projects by being the first to set up institutional framework. For the development of energy projects on fast-track basis in the public sector, it has established the Punjab Power Development Company which is registered with Securities & Exchange Commission of Pakistan (SECP). The provincial government has also set up Punjab Power Development Board (PPDB) as “One Window Facilitator” to promote and encourage private sector’s active participation.

As a result of Punjab government’s efforts, different small-scale power generation projects with a total capacity of 1393.85 megawatt have been initiated in public and private sectors. These plants are of varying capacity and would use wind, solar, hydel, coal, thermal or bio-gas for power generation.

Another important step taken by the Punjab government towards enhancing energy-efficiency was restarting work on the much-awaited Nandipur power project. It is an under construction combined cycle thermal power plant located at Nandipur near Gujranwala which was scheduled to be completed in April 2011 but couldn’t meet this deadline due to institutional inefficiency and lack of interest of the previous government in the centre.

This delay resulted in increasing the overall cost of the project – now estimated to be around Rs. 57.38 billion ($574 million). This is a classic example of how precious projects were ruined by the previous ruling coterie to satisfy its ego. In January 2008, Pakistan Electric Power Company (PEPCO) signed a Rs23 billion ($329 million) contract with Dongfang Electric Corporation of China to construct Nandipur power project and paid it a 10 per cent down payment. By mid-2010, much of the construction work at this power project was completed and it was expected to finish on schedule in April 2011.

However, the project suffered many delays as the summary, sent by the ministry of Water and Power for legal opinion of the ministry of law & justice, remained pending with the latter for two long years from March 2010 to March 2012. As a result of this inordinate delay, machinery worth $85 million remained stuck at the Karachi Port for over two years.

However, it is heartening that due to the personal efforts of Punjab CM, the development work at Nandipur power project is now in full swing and construction activities are being carried out as per schedule. Similarly, remobilization of the personnel of the Chinese company Dongfang Electric Corporation, which is contractor of the project, is also underway as per remobilization programme. The project is now said to be completed by December, 2014. Upon completion, the Nandipur power project will generate a total of 425 MW of electricity.

It is a big achievement of the Punjab government that its CM after a lengthy meeting with the chairman of Dongfang Company S. Zefu in Beijing during his previous visit to China persuaded him to resume work after which a new life has been infused in the project.

It is good to note that all the detained Nandipur material from Karachi Port has already been shifted to the project site within the shortest period of three months which is two months earlier than the estimated five months. This early transportation of total detained material from Karachi has not only created space to accommodate more project cargos at the port which would definitely be a source of revenue for Karachi Port Trust, but also caused savings of Rs300 million to the Northern Power Generation Company Limited (NPGCL). The Dongfang Electric Corporation Limited (DECL), after being pressed hard by the government of Pakistan and project authorities, has agreed for the five month early commissioning of the first gas turbine unit.

The early commissioning of gas turbine unit prior to the onset of next summer season will yield savings worth Rs13 billion as well as provide considerable relief to the people who have endured load-shedding for quite some time now. In the history of WAPDA, no machine had been commissioned in this record span of time. Owing to the commitment and keen interest taken by Punjab Chief Minister Muhammad Shahbaz Sharif, a saving of up to Rs three billion has been made so far.