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Wednesday, October 3, 2012

Better Pakistan | Power generation projects

Better Pakistan | Power Generation Projects (Part II)

In the first part the efforts of PMLN for electricity generation was discussed and it was stated that the efforts of present PMLN government in Punjab(2008-date), will be discussed. So here in the coming lines we will present the efforts of Punjab Govt. in meeting the demands of electricity to the people of Punjab.

On 19th April 2010, NA of Pakistan passed the 18th amendment in constitution of Pakistan. According to that amendment several departments were transferred to provincial govts. Among those departments are the power generation department. Most of the opponents in this regard consider Punjab Govt. or in other words Shahbaz Sharif responsible for the load shedding in Punjab. For them it was an agreement between one person and another to handover few papers. However, practical politics is very much different with the social media based politics. 

It happened unfortunately that even after the 18th amendment the working procedure and the shifting of departments was not a step function. It was a linear function with a poor slope. Departments were shifted with an intentional delay to deepen the crisis. Furthermore, several important parameters that are required by the investors are controlled by the federal Government. The fact that any investor requires a sovereign guarantee for investment, can only be provided by the Federal Govt. and the fact that the National Electric Power Regulatory Authority (NEPRA) is responsible for electricity tariff comes under Federal Govt. were  overlooked in the objections of the opponents. Its not because the opponents intentionally igonred these circumstances, its because as a nation we always want to  sparkle our political face by throwing mud on the efforts of other parties.  Remembering one title of a column by the de jure spokesman of PTI "زندگی اپنے محاسن پہ بسر ہوتی ہے اوروں کے عیوب پر نہیں "

Considering this brilliant advice we in the forthcoming lines will present the work done by PMLN during its tenure from 2008-2012 in Punjab. Using the available space and time,  as and when required, we will also try to recap the work done by the previous tenures of PMLN.

Story begins :

After the 18th amendment it was desired to set up organization to carry out the power generation projects. For this purpose an independent department was established which is known as Energy Department. The aim of this department is to pursue for power generation and oil and gas projects within Punjab. The functions of energy board are given here. This authority/department is responsible to design and inspect the work under the several acts related to power generation. The regulation of electric power is controlled by the Regulation of Generation, Transmission and Distribution of electric Power Act, 1997. Similarly for controlling the theft of electricity PMLN govt. in 1998 presented an ordinance. This ordinance is known as Offences in Respect of Electricity (Emergency Provisions) Ordinance, 1998. After establishing the basic department for the regulation of power generation, the Punjab department of Energy announced the revised version of energy policy 2006 in 2009. This policy formed the guidelines for the implementation of power projects through Punjab Power Development Board. This revised policy covers the power generation projects in public and private sectors. It also covers projects that are through private-public partnership.

The  proposed schedule given in revised energy policy for tariff approval from NEPRA is 60-180 days.  It is worth mentioning here that this regulatory authority was also established under the PMLN government, which passed NEPRA ACT in 1997. The energy department of Govt. of Punjab worked day and night under the command of Chief Minister Punjab to develop annual energy plan and strategy. The efficient work of PPDB is evident from the fact that within its budget capacity it has scheduled 35 projects. These projects together are able to inject 254.24 MW in the national grid. One project is run of water. The detail of these projects are given here. All projects are scheduled to be finished by 2014. May be someone else will be cashing our projects just like Gen. Musharraf spent his time by cashing the work of PMLN. 

On Sept. 15, 2011 Punjab Assembly passed an Act known as THE PUNJAB POWER DEVELOPMENT BOARD ACT 2011. It was assented to by the Governor of the Punjab on September 30, 2011; and, was published in the Punjab Gazette (Extraordinary), dated 3 October 2011, pages 37367-71. This act formed the basis for the for the establishment of the Punjab Power Development Board for the implementation of policies of the Government to facilitate the private investors in power sector and to harness the energy generation resources in the province.

For the first time in the history of Pakistan nontraditional methods of power generation are initiated by the PMLN govt. These projects include
  1. Biomass projects
  2. Waste to energy projects
  3. Biogas power projects
  4. Solar power projects
The Punjab govt. has planned spent more than PKR 88k Million till 2014. The development budget of Punjab Energy department is PKR 9000 Million in the year 2011-12. The detail of the  development budget can be seen in Annex-2 of annual plan of energy department of Punjab.

It is also worthy to consider the failure of Nandipur power project (425 MW). The Nanidpur power project is a perfect example of the selfishness and mismanagement of federal govt. The machinery required for the establishment of this power plant was intentionally halted at the Karachi port despite of the sue moto action taken by the Supreme court of Pakistan. The machinery was kept at Karachi port on the name of legal complications for 2 year, after all it was to be used for the people of Punjab and PMLN was the one who had a contract with the Chinese company. On Sept. 8,2012 it was reported on local newspaper that Chinese have cancelled the said project because of the delays in the commencement of the project.

The govt. of Punjab has also started the Renewable Energy Development Sector Investment Program under the ADB Loan No. 2286-PAK . Various projects under this program are shown in this report and in the figure below.

The location plan for Okara hydro power project is shown below (Source: Renewable Energy Development Sector Investment Program (REDSIP)).

Similarly, under the same program Marala Hydro Power Project worth 7.64 MW and Pakpatan Hydro Power Project worth 2.85 MW is also in progress. The initiatives of PMLN lead Punjab Govt. for power generation are given below [Reference: Punjab Power Management Unit].

  • Part-A:    Construction of five HPPs   (OCR Loan 2286-PAK)
    • Construction of Marala HPP (7.62 MW) RD. 2+850 UCC, Distt. Sialkot
    • Construction of Deg Out-Fall (4.04 MW) RD.282+340 UCC Distt. Sheikhupura
    • Construction of Pakpattan (2.82 MW) RD.112+350, Pakpattan Canal
    • Construction of Okara (4.16 MW) RD.199+000 LBDC, Distt. Okara
    • Construction of Chianwali (5.38 MW) RD.130+000 UCC Distt. Gujranwala

  • Part-B:   Feasibility Studies of additional five HPPs (OCR Loan 2286-PAK)
    • Lower Chenab Canal (LCC), (7.55 MW), RD. 0 +000       
    • Khanki Barrage   (KB), (14.9 MW), Right Bypass
    • Qadirabad Barrage (QB), (23.00 MW),   Right Bypass
    • Upper Chenab Canal (UCC), (3.58 MW),   RD. 133+ 296
    • Qadirabad Balloki Link Canal (QBLC), (7.68 MW),   RD. 304+985

  • Part-C Capacity Development of Energy Deptt.    (ADF Loan 2286-PAK))
    • Construction of office complex of PPDCL and Allied entities of Energy Department.
    • Management Consultants for Office Complex Building.
    • Capacity Development through Consultants, seminars, local/foreign training
We hope that the cultivation of these projects should be made by the founders PMLN, not by some one else like it happened in the past that the incompetent Parvaiz Elahi and co. spent their 5 years tenure on the projects designed by PMLN.

The Punjab Energy department has formulated the strong case of Punjab on their website, which is  presented below (Red colored text) for ready reference.

Punjab Energy Scenario:
An Overview of Energy Scenario in Punjab
Brief Facts

Ø       Punjab contributes 65 % of GDP
Ø       Punjab contains 60% of all industry with more than 48,000 units
Ø       Punjab consumes 62% - 68% of the total national consumption of electricity
Ø       Punjab currently faces shortfall of electricity around 3300 MW
Ø       SNGPL is facing shortage of 700 MMcfd
Ø       CNG stations across the province are closed for 3 days a week
Ø       6-18 hours of power load shedding during peak demand is a norm in urban and rural areas
Ø       Severe Gas shortages
Ø       DISCOs located in Punjab not only have low distribution losses but their revenue collection efficiency is better than the DISCOs located in other provinces (Annex 1). Thus the province of Punjab ends up subsidising the losses of other provinces both financially and in terms of load-shedding
Ø       Despite being the largest consumer of power and gas, Punjab has no control over quantum, duration and usage of either gas or power
Ø       Energy Department has facilitated and initiated more than 55 power generation projects in public and private sector with combined capacity of more than 1300 MW
Electricity Demand and Consumption (Punjab) – 12 Jan 2012


Demand (MW)
Supply (MW)
Shortfall (MW)






Ø       Electricity Consumption in Punjab is 62% - 68% of the total national consumption 
Gas– Demand and Supply – Jan 2012

Demand – Million CFt per day
Supply – Million CFt per day

Shortfall MMCFD



Ø       CNG Stations across the province are facing three days a week closure

System Efficiencies

  • The above table indicates that DISCOs located in Punjab not only have low distribution losses but their revenue collection efficiency is also much better than the DISCOs located in other provinces. Thus the province of Punjab ends up subsidising the losses of other provinces both financially and in terms of load-shedding.
  • Currently, PEPCO receivables stand at Rs. 284 billion out of which receivables against the Government of Punjab are only Rs. 6 billion, however, Punjab is facing proportionally more load-shedding as compared to other parts of the country.

 Implications for Punjab
Punjab is the worst affected province:

  • 6-18 hours of power load shedding during peak demand is a norm in urban and rural area.
  • 3-4 days gas load shedding in Punjab
  • Serious negative implications for Punjab of Constitutional provision that the province in which a well-head is natural gas is situated shall have precedence over other parts of Pakistan in meeting requirements from a well-head.
  • Most of the industry is running on 40 to 50% capacity resulting in large scale lay-offs and unemployment with serious law & order and social implications
  • Despite being the largest consumer of power and gas, Punjab has no control over quantum, duration and usage of either gas or power
  •  Several industrialists have threatened to move out of the province if their gas supply issue is not resolved.
  • Textile production in the province has dropped 25 per cent in textile sector owing to the gas shortage.
  • Hundreds of thousands workers have become unemployed as a result.

There are arguments that might come against PMLN but the facts must be liberal in nature. The fact that the federal govt. is controlling the power flow in national grid through federally administrated PEPCO and the tariff decision is not in the control of  Punjab govt. is evident that who is actually responsible for the failure of Nandipur Power Project of PMLN lead Punjab Govt. The unjustified load shedding schedule specifically designed for Punjab to fan the flame of hatred against PMLN. It should be noted that the distribution companies in Punjab have impressive recovery rate. The industrialists of Punjab are becoming the victim of PPP govt. The anguish of those who have been severely affected by the load shedding is destabilizing the economical situation of country. However, we do not claim that we are prefect but it is also not justified to claim that Punjab govt. is responsible for power outages in Punjab.