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Energy Projects...Updates

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Federal govt restores seven CPEC powerplants’ tax exemption


The federal government has restored the tax exemption for the seven power plants currently being developed under the China-Pakistan-Economic-Corridor (CPEC) project, .

Reportedly, the following powerplants have been exempted from tax duties on the import of heavy machinery:

  • Kohala Hydro Company (Private) Limited – with a generation capacity of 1,124 MW (date of IA execution: May 25, 2020)
  • Azad Pattan (Private) Limited – with a generation capacity of 700.7 MW (date of IA execution July 6, 2020
  • SK Hydro (Private) Limited – with a generation capacity of 870.25 MW (date of IA execution: April 11, 2014).
  • CHIC Pak Power Company (Pvt) Limited – with a generation capacity of 300 MW (date of execution: April 8, 2021).
  • Thal Nova Power Thar (Private) Limited – with a generation capacity of 330 MW (date of IA execution November 24, 2017)
  • Thar Energy Limited – with a generation capacity of 330 MW (date of IA execution November 10, 2017)
  • Thar Coal Block-1 Power Generation Company (Private) Limited – with a generation capacity of 1,320 MW (date of IA execution: December 12, 2019.
However, the government has instructed companies to meet the following criteria in order to avail the tax exemption status:

  • The company shall enter into an Implementation Agreement (IA) with GOP
  • The contractor shall submit a copy of the contract or agreement under which he intends to import the goods for the project.
  • The chief executive or head of the contracting company shall certify that the imported goods are the project’s bona fide requirement.
 
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Pakistan invites Chinese firms to invest in renewable energy sector

  • Chinese delegation interested in energy projects, especially wind corridor in Thatta
BR Web Desk
30 Jun, 2022

Prime Minister Shehbaz Sharif on Thursday invited Chinese companies to invest in the country’s renewable energy sector, especially in solar power.

The PM expressed these views while talking to a delegation of Chinese state-owned company NORINCO that had called on him in Islamabad, according to a statement.

The delegation was led by vice-president NORINCO International Wang Xiaobing and CEO NORINCO International (Pakistan), Li Chen.

The prime minister also appreciated the company for its role in the Lahore Orange Line Metro Train project, which he said is facilitating hundreds of thousands of commuters in Lahore daily.

He recalled that it was for the first time that open bidding took place in a Government to Government (G2G) project i.e. Lahore Orange Line. He stated that negotiations were held with the lowest bidder, leading to a saving of $600 million, adding that it was a milestone in the development history of Pakistan.

The NORINCO delegation showed keen interest in investing in the wide spectrum of renewable energy projects in Pakistan, especially the wind corridor in Thatta for where a 100 MW wind power project has been proposed.

As per Pakistan’s latest power generation mix, non-renewable energy sources account for over 70% of power generation in the month of May.

The remaining is made up of renewable sources of energy, with hydroelectric power leading the way with 24% of the power generation, whereas wind accounts for 5%, while solar power contributed only 1% to country’s energy needs, with a generation of only 90kWh last month.

NORINCO also highlighted fibre optic along railway lines, copper and iron ore mining at proven reserves, and infrastructure development in big cities as key investment opportunities.

The Prime Minister said Pakistan is open to investment and will facilitate the process. He stated deepening China-Pakistan economic cooperation is critical to Pakistan’s socio-economic uplift, while highlighting the significance of CPEC as transformational project for the mutual benefit and development of both the friendly countries.

Meanwhile, Member of the Politburo of the Central Committee of the Communist Party of China (CPC) and Director of the Central Commission on Foreign Affairs of the CPC Yang Jiechi arrived on a two-day visit to Pakistan on Wednesday.
 
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Suki Kinari Hydropower Project located on Kunhar River in beautiful valley of Kaghan, Khyber Pakhtunkhwa, will generate over 884 MW electricity, and is expected to be completed by end of 2023.


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Diamer Basha Dam - 4500MW

Construction works commenced in 2020..
8.1MAF water storage and will irrigate 1.2 million acres agricultural land..
Annual generation 18,097 GWh.
Construction Period: 09 years..


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Successful Test Run of 1,263MW Thermal Power Plant Completed in Jhang

The China Machinery Engineering Corporation (CMEC) has successfully completed a seven-day reliability test run of the 1,263 MW Thermal Power Plant Unit-1 in district Jhang, Punjab.

A spokesperson for the corporation said that Gas Turbine 1’s (GT-1) commercial operations will begin on 6 July after the stopped machines are tested for their heating and cooling.

The plant completed its initial test by generating 403 MW instead of its guaranteed 400 MW.
 
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Diamer Basha Dam - 4500MW

Construction works commenced in 2020..
8.1MAF water storage and will irrigate 1.2 million acres agricultural land..
Annual generation 18,097 GWh.

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There is no joy in increasing renewable sources for our country. There are examples of developed countries struggling with it, just to parrot the delusion of green revolution. What I see is our economy getting dragged down by them. Its already a fact that renewables are the most expensive energy sources and they will never be enough.
 
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Suki Kinari Hydropower Project located on Kunhar River in the beautiful valley of Kaghan, Khyber Pakhtunkhwa, will generate over 884 MW of electricity and is expected to be completed by end of 2023.


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Suki Kinari Hydropower Project, a clean energy project under CPEC umbrella.
It will add 884MW to the national grid after completion and entering into commercial operation.

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Mohmand Dam Hydropower Project - 800 MW
Under Construction since September 2019
Gross Storage 1.2 MAF
Annual Energy Production 2,862 GWh
Completion date: 2025..


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Wapda for direct contracting to rehabilitate NJHEP

  • Scraps open bidding, says direct contracting will avoid delay
Mushtaq Ghumman
27 Jul, 2022

Water and Power Development Authority (Wapda) has reportedly proposed direct contracting instead of open bidding for rehabilitation of 969-MW Neelum Jhelum Hydro Electric (NJHEP) Project to avoid delay, sources close to Chairman WAPDA told Business Recorder.

Prime Minister has directed to hire the best international consultants for carrying out investigation and suggesting remedial measures while pre-qualifying the prospective firms based on their expertise and capacity in doing similar work.

Neelum Jhelum Hydropower Company (NJHPC), a subsidiary of WAPDA, has briefed an inter-ministerial committee headed by Minister for Water Resources on July 26, 2022 that open competition bidding will be time-consuming, saying that after following the complete steps involved in open competitive bidding method based on pre-qualification, the international consultants’ could be mobilized tentatively in 150 days in a best case scenario, once the bidding process starts.

Such mobilization of international consultants could be 115 days after the estimated completion of dewatering, assuming the bidding process continues without any snags like request of firms to extend the submission dates of EoIs and/or proposals, etc. Interest of the prospective firms to bid is not guaranteed.

Neelum-Jhelum Hydropower Project: Nepra directs management to restore plant’s operation

On July 13, 2022, the Prime Minister called a meeting on this issue and expressed his serious concerns on the outage of 969-MW plant.

After the meeting the Prime Minister’s Office on July 15, 2022 issued certain directives which are given below along with the current status of compliance: (i) Project Management Team shall work round the clock to complete the remedial works at the earliest which has been implemented ;(ii) A Committee consisting of the following shall formulate/ finalize ToRs for investigation, diagnostics and remedial measures to be suggested by the Third-Party Independent Expert(s) , i.e., Minister for Water Resources, Minister for Power, Minister for Law & Justice, Dr. Muhammad Jehanzeb Khan, SAPM, Secretary, M/o Water Resources; (iii) Secretary, M/o Power and Chairman, WAPDA.

Implementation on this recommendation is in process as the Committee is holding its meeting soon.

Commenting on directing contracting, Wapda says that open competition would be avoided and proposals could be sought from a limited number of firms known to WAPDA/ NJHPC, suggesting that PM’s directives should be reviewed to avoid pre-qualification.

“The matrix of pros and cons suggests the ‘Direct Contracting’ method of procurement as the shortest possible course which if adopted may have the international investigation Consultants mobilized within 20 days of completion of dewatering,” the sources quoted NJHPC as saying.

In order to save time, under PPRA rules 42(c) (v), NJHPC started engagement with the original contractor of the project M/s China Ghezouba Group of Companies (CGGC) to undertake task of remedial/ repair and maintenance works for which the contractor has shown willingness.

NJHPC has held series of meetings with the Project Consultants and the Contractor.

Consultants proposed design (mucking 2 followed by concrete lining) for the remedial works to which Contractor responded in meeting on July 21, 2022, with modified design (support the damaged portion with lattice girders followed by mucking and shotcrete). Accordingly, Consultants advised Contractor to submit quotation for both the options.

Consultants will finalize the methodology. It is; however, clarified that the actual work requirements can only be defined once extent of damage is known by undertaking inspection after the tailrace tunnel is completely dewatered.

On July 4, 2022 in the morning when the plant was generating electricity at its full capacity of 969 MW, abnormal increase in water leakage was reported in the powerhouse cavern at El. 600m and below.

The water leakage was managed and controlled through continuous operation of the in-built drainage pumps, and by diverting the excess water to other drainage holes available in the powerhouse.

All precautionary efforts were adopted to save from potential short-circuiting the energized electrical equipment in the powerhouse.

In the morning of July 5, 2022, an emergency meeting of the project’s O&M and Consultants’ teams was convened in the powerhouse to analyze the situation for deliberating on the root cause of the issue of water leakage.

A detailed visit of the powerhouse was carried out. Further investigation revealed that the pressure in tailrace tunnel increased from 600m to 616m.

On the basis of the severity of the situation, following additional measures were immediately taken to avoid possible damage to the powerhouse and installed equipment: (i) generation was reduced gradually to 200MW due to which tailrace tunnel’s pressure dropped from 616m to 602m.

This resulted in significant reduction of water leakage in the powerhouse;(ii) subsequently tailrace tunnel started increasing once again due to which the load was further reduced from 200MW to 125 MW; and (iii) on July 6, 2022, it was further noted that even at generation of 125 MW, the pressure in the tailrace continued increasing, therefore, on July 6, 2022, all the units were stopped and kept in standby mode.

Sharing details of possible causes of the incident, the sources said, project consultants analyzed the situation and submitted an initial report according to which, primarily, following are the possible causes: (i) there is a high probability of a failure of shotcrete lining leading to rock fall in the tailrace tunnel; and (ii) the high pressure noticed in the powerhouse may be attributed to such blockage created in tailrace tunnel due to possible rockfall.

The Consultants have recommended that NJHPC’s Plant O&M team should investigate the apparent tailrace tunnel blockage as soon as possible, the sources said adding that the fastest way to inspect the tailrace tunnel would be to dewater the tailrace tunnel using permanent tailrace dewatering system and the truck-mounted mobile dewatering pump.

During hiring of independent experts(s) for investigation, diagnostics and suggesting remedial measures, utmost care shall be taken in order to ensure that only those companies are pre-qualified which possess the requisite experience, expertise and capacity. The hiring process maybe completed at the earliest.

The independent experts shall also be responsible for validating the remedial measures to be undertaken by the contractor. During the diagnostics the Expert(s) shall also look into the possibility of occurrence of blockage in other components of the Project and suggest measures to prevent any such failure in future.

Since the Neelum Jhelum Project is covered under the contract of insurance, the Neelum Jhelum Hydropower Company (Pvt) Limited shall lodge claim(s) with its insurers in a timely manner to compensate for the losses incurred by the Company.

Tunnel dewatering started on July 10, 2022, after making necessary arrangements. As standby arrangement, spare mobile pumps were also arranged from Tarbela Dam which reached site on July 9, 2022. Truck mounted mobile dewatering pump is ready to be used in the main tunnel as clearing of mud in access tunnel has been completed on July 22, 2022. Over 15 m dewatering in the tunnel has been achieved against total 20 m. Long side tunnel and less water seepage from blockage has slowed down the dewatering.

WAPDA/NJHPC Engineers have already made access to the main tailrace tunnel from access tunnel of about 300m, and no serious problem in that part was noticed.

Copyright Business Recorder, 2022
 
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Due to the crisis, Pakistan is in need of Financial help, the Federal government has decided to sell Balloki and Haveli Bahadur Shah power plants for $2 billion to a gulf country.

The main reason came across the selling of Power plants is that no friendly countries are assisting Pakistan Financially as Pakistan is in need of Financial Aid.

The government has made preparations to sell the power plants for $2 billion. Both Power plants are planned to be sold to Gulf countries.

Furthermore, the government has also decided to sell shares of the three oil and gas companies including the OGDCL. This is very sad to see friendly countries not helping Pakistan in time of need.
 
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