China Pakistan Economic Corridor (CPEC) is a symbol of long-term friendship and economic co-operation between China and Pakistan and it will help achieve turnaround of the economy. These views were shared by Chief Executive Officer, China Power Hub Generation Company Pvt Limited (CPHGC), Zhao Yonggang while talking to Business Recorder on Wednesday.
Yonggang said CPEC is much beyond the trade route for Pakistan. Apart from building crucial infrastructure for the long-term needs of Pakistan, CPEC project would assist bridging the energy gap which is the major impediment to the steady economic growth of Pakistan.
"Availability of affordable energy for the industries in developing countries like Pakistan is the top priority of the government as it wants to see economic turnaround in the country, said Zhao Yonggang. We have learnt it from our experiences in China that economical energy production and affordable availability to the industries is the key to long-term industrial growth," he added.
CEO CPHGC Zhao Yonggang said CPHGC is a joint venture company formed by two sponsors, China-based company China Power International Holding Limited (CPIH) and Pakistan-based company Hub Power Company Limited (HUBCO). CPHGC has been set up as the special purpose vehicle (SPV) for 1,320 MW coal-fired power plant in Hub, Balochistan. The estimated cost of the project is $2 billion.
Zhao Yonggang said CPHGC's coal-fired power project would produce energy at an estimated cost of around 8 cents per kWh which is cheaper than the current cost of energy production in Pakistan. This will save hundreds of millions of dollars for the country every year and industries and public would also benefit by the lower energy bills. SPIC is already working on several projects of strategic importance in Pakistan. He said Pakistan is a high priority investment destination for SPIC and it is also exploring the possibility of more investments in projects in Karachi.
SPIC wants to invest more in Pakistan like it recently invested through its subsidiary Shanghai Electric in K-Electric, which is Pakistan's largest electricity distributor. "We need to remove the misperceptions about foreign investment. We should realise that new investment in power projects would help country move forward and achieve greater economic prosperity. If we provide attractive investment environment to foreign investors they would prefer to reinvest the profits and expand their operations in that country."
CPHGC CEO informed that a delegation of China Development Bank recently visited the CPHGC project site and reviewed the progress on the project. They also visited PPIB officials in Islamabad and have submitted their report to the higher management of the Chinese Bank. We are fully confident to secure US $1.5 billion loan for this project by a consortium of Chinese Banks lead by China Development Bank of China.
"CPHGC has selected two EPC contractors for this project that include NWEPDI (North West Electric Power Design Institute) & TEPC (Tianjin Electric Power Construction) Consortium whereas Jetty EPC is CHEC (China Harbor Engineering Company Ltd) which is operating in Pakistan for the last 20 years," Zhao Yonggang said.
Talking about the import of coal for the 1,320 MW project, Zhao Yonggang stated that coal would be imported from South Africa and Indonesia. CPHGC is planning to construct a barge jetty to provide approximately 4.3 MTPA of coal to the plant. The jetty will be connected to the shoreline through a trestle and causeway.
To avoid any delay in the project, CPHGC has started the civil work on the project site in August 2016. The ground levelling, land marking, security infrastructure, temporary jetty and accommodations for the workers have been made and we would start pouring concrete in the foundation structure of the power plant from this month. "Currently, over 650 workers are working on the project site out of which 500 are locals" said Zhao Yonggang. He claimed the economic boom of China is because of the affordable energy production through coal. From January to November 2016, Chinese Government has approved 107 new power projects and the Coal fired projects accounts for the big proportion. This speaks volume about strategic importance of coal in the overall economic growth of any country.
"Apart from building power projects, Pakistan also need to work on its power distribution network so that energy needs of all four provinces could be catered amicably," Zhao Yonggang said. State Power Investment Corporation (SPIC), newly-established through the merger of China Power Investment Corporation and State Nuclear Power Technology Corporation, is a large state-owned enterprise under the administration of the Central Government with a registered capital of RMB 45 billion and total assets of RMB 775.1billion.
It is the only integrated energy group in China that holds assets of hydropower, thermal power, nuclear power and new energy simultaneously. Being one of China's three nuclear power developers and operators, SPIC embraces outstanding industry chain advantages in the R&D, design and manufacturing of nuclear power components and equipment, as well as the construction, operation and management of nuclear power plants (NPP).
Zhao Yonggang while reaffirming his commitment to Pakistan said that we are firm in our resolve to deliver on the promise of propelling 'growth through energy.' Talking about the socio-economic benefits of the project for locals in Hub Balochistan, Zhao Yonggang said that, "Once project becomes operational, one percent of total profit every year would be spent on the welfare of locals. The coal project will bring immense socio-economic benefits for the country, specifically for the province of Balochistan. The province will receive a tremendous boost during the construction period of the project, which will last around 4 years. The project construction will provide opportunities through induction of skilled, semi-skilled and unskilled workforce by Project Engineering, Procurement and Construction (EPC) contractors though sub-contractors during the construction period. In addition, other economic activities around the Project Site are also likely to witness a major increase. We have a huge portfolio of CSR activities planned at the Hub Site. CPHGC's mission is to make advancements in the province of Balochistan in terms of Infrastructure, Medicare, Livelihood, Education, Environment and Employment."
Zhao Yonggang informed that as per its current CSR program, China Power Hub Generation Company (CPHGC) has signed a MoU in July 2016 with the Hunar Foundation for provision of a one-year vocational training program for 30 local students from Hub-Tehsil Gaddani, Balochistan.
The training program is being planned in collaboration with The Hunar Foundation which is a non-profit organisation that took roots with the objective of finding a solution to the issues of unemployment for the youth through quality vocational training, they will be responsible for the arrangement of boarding, lodging and food for the selected (admitted) students throughout the duration of the course.
"CPHGC is providing complete financial support for international standard vocational training that meets the expectations of the market, leading to employment or small business creation and eventually economic freedom and empowerment, total cost of the project is 10.32 million," the CEO CPHGC said. CPHGC's ongoing training initiative is a witness of its true desire for the improvements for the Hub locals and for Balochistan.