According to an official announcement issued after its meeting under the chairmanship of the Minister for Water and Power, Liaquat Ali Jatoi, the Private Power and Infrastructure Board (PPIB) accorded approval to 16 private sector power projects of 3700 MW capacity, estimated to cost of $4 billion.
While recommending restoration of the 7.4 cent tariff per unit for hydel power projects, as provided in the 1995 power policy, the PPIB decided to approach the Economic Co-ordination Committee of the Cabinet, for in its view no investor would come forward under the current tariff policy.
It will be recalled that the ECC had earlier decided to extend guarantee for the power projects of below 50MW, following NWFP and AJK governments' plea of inability to develop projects, under the policy for power generation projects, 2002 which asked the provinces to manage investment for power projects of up to 50 MW, with the federal government supporting projects of above 50 MW.
The report, under reference, also quoted an official as saying that "this decision will be a milestone in the implementation of hydel power policy of 1995," and it would help the 84MW New Bong Escape Hydropower Project achieve financial close, and commencement of construction.
He also hoped that, with the ECC restoring the 1995 tariff three withheld projects, would be in a position to proceed on a fast track, besides providing a fillip to four other power projects with a combined capacity of 900 MW, at a total estimated investment of $1.1 billion.
While emphasising the importance of hydel power generation, the PPIB accorded approval to the award of seven raw hydel sites, as the government expected $2.2 billion investment in these projects of 1,804 MW capacity. Further, proposals were invited from the private sector, through advertisement in the local and international press.
It will be noted that, among other things, the Board accorded approval to the 200 MW Green Power Project and the 200MW Project of Brazilian Energy in Sindh, along with agreement in principle, for 225MW Power Project in Punjab, besides issuance of LoI for 225MW power project at Bhikki. Mention in this regard may also be made of its advice to the sponsors of the 130 MW Western Electric Power Project, and the KESC Managing Director, to settle the tariff issue in a couple of days, failing which the project would be allocated on competitive bidding.
It will be recalled that, following repudiation of the 1995 power policy, basically on the issue of high tariff it allowed to hastily launched independent power projects, too many shifts and changes were made in the overall approach to power development.
The power policy of 2002 was launched to address the deepening power crisis in the country. However, its implementation to the desired extent will appear to have remained neglected for one reason or the other. In view of increasing gravity of the situation, special efforts had to be made to remove major impediments, from time to time in a disjointed manner. This has reference, among other developments, to various PPIB decisions.
In this regard, mention may, of course be made of an earlier report pointing to a move for so amending the Power Policy 2002 as to ensure its smooth sailing against negative currents. The new approach included representation to the provinces in PPIB, slashing of project processing time, and tax exemptions to dual-fuel power projects. Moreover, Prime Minister Shaukat Aziz was reported to have dropped the hint of changes in the structure of PPIB and Nepra, to make them professional.
This was besides a reported move to give 50 percent representation to private sector on the PPIB board, along with a proposal for tax exemptions to dual-fuel projects, in view of prospects of availability of gas for power generation projects only up to 2011. From the decisions of PPIB it will appear that widespread changes have become necessary, some of them through recourse to the abandoned provisions of the 1995 policy.
Add to this, the Prime Minister's latest directive to PPIB and Wapda, to resolve genuine problems of Independent Power Producers, including those related to fuel supplies and payments, and it will point to the urgent need for a whole new, all embracing effort, while also taking the benefit of hindsight on certain tormenting issues.