Punjab govt likely to set up 1320mw coal power plant


Officials say govt decides to establish plant in Rahimyar Khan just to facilitate a business tycoon

Despite warning of surplus power generation and capacity payments to power producers by the end of 2019, the Punjab government has decided to set up a 1,320 megawatts coal-fired power project at Rahimyar Khan, according to officials.

On condition of anonymity, the Power Ministry officials informed Pakistan Today that the Punjab government has decided to establish the coal-fired power plant just to facilitate a business tycoon. Earlier, the project was dropped by the federal government as well as China from incorporating it under the umbrella of the energy projects of the China-Pakistan Economic Corridor (CPEC).

They also said that both the authorities have termed this power plant impracticable, as it would be operated on imported coal. The 1320mw power plant will cause extra burden of Rs 500 billion on national exchequer and masses as impact because payments for setting up this project will be cleared in the next 25 years, the officials said.

The Punjab government has signed a memorandum of understanding in this regard with China’s Huaneng Shandong Power Generation Company for setting up the plant in Rahim Yar Khan during the first week of July this year. Under the agreement, the Chinese company will extend cooperation to the provincial government for setting up 1320mw plant. It will also provide technical assistance for setting up the coal power plant.

Additional Chief Secretary (Energy) Jehanzeb Khan and Shandong Power Generation Company of China signed the agreement. It is interesting to note here that former secretary Younus Dhaga and Managing Director of National Transmission and Despatch Company (NTDC) Dr Fiaz A Chaudhry have been removed from the top slots ostensibly because of their strong opposition to setting new power plants especially those which will run on imported coal.

Earlier, former secretary had imposed a ban on setting up those coal fired power plants in the country which will run on imported coal. Though this ban remained intact for a limited period, however, a Cabinet Committee on Energy (CCoE) held under the chair of Prime Minister Nawaz Sharif lift the moratorium and granted permission for the establishing more coal-fired power plants.

Similarly, Dr Fiaz Chaudhry who was staunch critic of setting up new plants has been shown the door. He was of the stand that there would be surplus power generation by the end of 2019 due to on-going power projects. Due to surplus generation of electricity, some of the power plants will be kept shut down for long hours while the general public and national exchequer will have to bear additional burden in the form of capacity payments to IPPs (independent power producers) only because of low demand in comparison to the power production during the said year.

Dr Fiaz also advocated at various forums that Pakistan was heading towards a capacity trap because of loads of additional generation capacity currently in the pipeline that would add to the circular debt crisis as capacity without matching growth in demand will lead to higher capacity payments.

Copies of official documents of NTDC available with this scribe has declared present demand of electricity at 25,000mw and warned the Power Ministry that power production would be in surplus during 2019 due to the on-going power projects. It is pertinent to mention here that country’s power sector has been struggling to control the prevailing energy crisis of the country.

And, power and planning ministries have initiated above $30 billion worth 26 power projects with installed capacity of 18,000mw without obtaining the information/data on the demand of electricity. And the prime minister while chairing a meeting of CCE on May 30 had advised the Power Ministry to present a report on future electricity demand. According to the power-sector expansion plan, there will be a surplus of electricity in the country by the end of 2019.


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