Daily Times

More energy woes are awaiting the nation as the government has reportedly shelved the much hyped 6,600 MW Gadani Power Project in Balochistan mainly due to lack of investor interest. The idea to set up the project comprising 10 coal-based power plants of 660 MW each was floated in early 2014 with the prospect of receiving Chinese investment. However, it seems the Chinese investors wanted to take up the project on their own terms without following the prescribed Public Procurement Rules. In the presence of a media onslaught and vibrant judiciary, these undercover deals have become increasingly impossible. Later, the government invited expressions of interest from local and foreign investors on the basis of international competitive bidding through the Private Power Infrastructure Board. However, due to the absence of any infrastructure and visible policies, very few serious investors were ready to take the risk. So the result is obvious. The project has even been excluded from the Pak-China Economic Corridor Programme. The rationale behind the launching of this mega project with seed money of Rs 1 billion was to overcome the energy crisis. Presently, the government has to pay billions of rupees on purchase of diesel and furnace oil for keeping the thermal power plants operational to produce the much needed electricity. However, thermal generation costs about Rs 16-18 per unit while the highest slab billeded to consumers is Rs 9 per unit. The difference, in the form of subsidies, is borne by the government. The government intended to try and change the energy mix to bring down costs and make it more affordable. Coal, albeit imported until such time as the huge Thar reserves can be tapped, seems a cheaper alternative. The example of China is there, whose rapid economic rise in the last three decades was massively dependent on energy derived from coal. However, this dependence has caused serious environmental problems in China.

The fate of the Gadani power project now hangs in balance. The Pakistan Power Park Management Company was formed to develop, maintain and operate the project’s infrastructure facilities including a jetty for the import of the 20,000 tons of coal required per year. The Balochistan government provided 5,000 acres of land in the Gadani coastal area as its equity. But it all went wrong apparently due to financial constraints. It is no less than tragic that the government failed to implement this ambitious project. The performance of the present government seems worse in the energy sector compared to previous regimes. Long term planning and its proper implementation are what the government has failed to do. Though coal energy is cheaper, other issues were not kept in mind before the launching of this project. Our country cannot afford wastage of resources and funds. Instead of pursuing half-baked ideas and projects, the government should take stock of all the pros and cons and roadblocks of every initiative. The government should arrange funding for the Gadani project by negotiating with the original Chinese investors. That may even open up the possibility of funding for the necessary infrastructure, without which the project cannot take off. *