- Iqbal says Rs 250 billion allocated only for LNG based power projects
- Identification of SEZs location along CPEC to be identified in three months
Minister for Planning and Development Ahsan Iqbal said on Thursday that the size of the Public Sector Development Programme (PSDP) for the next fiscal year will be more than Rs 580 billion, out of which Rs 250 billion would be allocated only for power projects run by imported Liquefied Natural Gas (LNG).
The minister said this at a specially arranged briefing for journalists on the China Pakistan Economic Corridor (CPEC).
“The LNG power plants are being built in the public sector to expedite their completion till 2018 and options will be used to sell them to investors during their completion”.
In reply to question, the minister said the Karachi Nuclear Power Plants will be set up through a special purpose vehicle (SPV), company, which will be taking loan from the Chinese government and it will not be part of the budget. China has already approved $ 6.5 billion for the nuclear power plants. The government decided to set up SPV to keep Rs 120 billion annual expenditure on the project outside the PSDP. It will help retain the fiscal deficit within the limited agreed with the IMF. The Chinese government and IMF have approved the scheme.
The minister said that the government would prioritize development projects to provide the necessary financing for the 3,600MW LNG-based projects. Other than the LNG power project only one coal based power project at Jamshoro financed by Asian Development Bank has been kept in the PSDP of the next fiscal year.
He said the federal government would not provide any financing for the Orange Line train project of Punjab while it will provide Rs 16 billion for Green Metro bus project and fifty per cent financing for K-4 water project of Karachi and financing for N-85 highway in Balochistan.
The minister said the controversy over the Gwadar-Khunjrab road was due to lack of information. The government has clarified to the political parties that firstly the western route which passes through KP and Balochistan will be completed by December 2016. He said the port will be linked to the central and eastern routes later.
Chinese investment in the power sector will be under the IPP mode. Chinese investors will arrange financing for the CPEC projects from their Development Finance Institutions (DFIs) for which Chinese government already has allocated target ceiling. “Chinese investors will be protected through a lethal and effective force”, he said adding, “let the ambiguity remain on the structure of the force for effective security”.
The minister said that the political parties have been taken into confidence over the special economic zones (SEZ) along the CPEC.
“Other than Gwadar no location has been identified for SEZs. The joint working group consisting of Chinese and Pakistani experts to identify the location is yet to be set up”.
However, he said the political parties will be taken into confidence once the process of identification starts. “Everything is being done scientifically with the principle that the easiest comes first”. The identification of location for SEZs will take at least three months.
