Cost of Dhabeji SEZ power project falls by Rs 106 million

The total cost of "Provision of Electricity for Dhabeji Special Economic Zone (SEZ)" project fell by about Rs 106 million in the approved PC-1 compared to original one, ostensibly on the back of slight depreciation in dollar value against local currency.

The original cost of the project was estimated at Rs 4.047 billion, which was brought down in the modified PC-1 to Rs 3.941 billion that was approved in Central Working Development Party (CDWP) recently. The fall in the total cost of the project was caused mainly due to decline in Foreign Exchange Component (FEC) of the project. In the original PC-I the FEC was calculated at Rs 160.12 against one dollar.

However, the appreciation of local currency against dollar resulted in the decline of FEC, which was estimated in the modified PC-I at Rs 155.94 against a dollar.

The project has been designed to provide electricity to Dhabeji SEZ in Sindh, which one of the SEZs to be developed under China-Pakistan Economic Corridor (CPEC).

According to official document of the project, Karachi Electric has planned construction of 220kV Dhabeji SEZ Grid Station to supply ultimate load of 250MW under the applicable provisions of the Nepra Rules and Regulations to DSEZ.

Document said that the power sector aim is to provide reliable, uninterrupted power to its consumers/SEZs. Keeping in view the present loading position and increasing trend of the power demand in near future, immediate requirement has been established to enhance the capacity of the existing grid stations by addition/augmentation of 220kV and 500kV grid stations.

The proposed project will result in electrification of DSEZ and the financial and economic benefits analysis is based on the economic benefits to be reaped by the economy through industrialization.

This would lead to production, the GDP improvement, positive balance of payment by exports and creation of jobs for people thereby reducing unemployment and improving financial wellbeing of the people.

According to document, an implementation agreement in the form of a tri-party agreement amongst KE, the Sindh government and the federal government would be undertaken on the approval of this PC-1 and funds allocation.

The agreement would spell out rights, obligations of each party and clarify procedure for the release of funds and utilization on a phase-wise basis for the execution of the project. The implementation period of the project is three years for which Rs 1.210 billion has been earmarked in Public Sector Development Programme (PSDP) for financial year 2019-20.