‘CASA-1000 deal with Tajikistan disastrous for Pakistan’

ISLAMABAD: The Ministry of Planning, Development and Reforms termed CASA-1000 deal with Tajikistan disastrous and detrimental.  Pakistan’s electricity consumers will pay the mammoth amount of $1.5 billion in 30 years and will have to pay $50 million as transit fee to Afghanistan each year.

The Planning Commission also says that the transmission charge of US cents 2.91 is ten times higher than that of Pakistan’s (National Transmission Dispatch Company) NTDC and 3 times higher than that in Europe and the present CASA tariff is around Rs10 per kWh which is higher than the putative benefits claimed for this project originally.

This is expected to escalate as the feasibility study has been done in 2011. The Energy Wing of Ministry of Planning, Development and Reforms in its submission to Nepra of which copy is available with The News has exposed the claims of Ministry of Water and Power that it has inked a good deal under CASA-1000.

It also unfolds that current hydro tariff in Pakistan is under 2.5 cents and identical is the case for hydro power tariff in India. Internationally, power purchase agreement parting to wind power and others have been signed in the US is around 2.5 cents.

And at present, Afghanistan is being supplied energy from three different countries in the region. “Kabul imports 500GWh at 3.5 cents per unit from Tajikistan, 200GWh from Iran at 4 cents per unit (including aid of 1 cents/unit) and from Turkmenistan at 3 cents per unit. “This is the main reason that Afghanistan is not very much interested in CASA project as it has surrendered the costly electricity of 300MW in the favour of Pakistan,” argues the Planning and Development Ministry.

The project being implemented, Energy Wing suggest, is quite different from the assumptions of the feasibility study by SNC LAVLIN which created and justified the project in the first place. The cost of supply of US1.5 cents per unit from Tajikistan had been assumed in the feasibility study while actual agreement is based on US5.15 cents per unit. In our view, the Planning Commission says, either average cost or hydro tariff should have been used, which would result in much less benefit-cost ratio.

The Energy Wing in its observation also says that the cost of the project excluding IDC (interest during cost) is estimated at $873 million based on current market conditions which may change over time in response to market volatility. And the CASA-1000 transmission project will transmit 1,300MW of surplus hydel power generated in the Central Asian States i.e. Tajikistan and Kyrgyz Republic through Afghanistan to Pakistan. The total distance covered by these transmission lines is 1,200km.

The full CASA-1000 transmission lines will move electricity at high voltages between the Kyrgyz Republic and Tajikistan (the first 477kms) and from Tajikistan to Afghanistan and Pakistan (the next 750kms). Each country will be responsible for construction of transmission line in its jurisdiction. Out of 1,300MW of exported power, Pakistan will get 1,000MW of power while Afghanistan will receive the remaining 300MW.

The transmission lines covering a distance of 100km from Pak-Afghan border to Peshawar are to be constructed along with converter station.

The major portion of transmission line will be laid down in Afghanistan, whereas; small portion of 100km will be in Pakistan. The Pakistani side mainly consists of tribal areas or settled troubled areas. The source of energy with availability of surplus power from Kyrgyz and Tajik Republics, the tariff of US9.41 cents per kWh as mentioned by NTDC, Afghanistan disinterest in consuming power and safeguarding the interest of Pakistan by protecting the entire transmission line are some of the key issues needed to be resolved.

The Energy Wing says that only PPAs (Power Purchase Agreements) using residual fuel oil (RFO) and diesel have been considered for tariff.

The rate for firm energy is 13.2 US cents per unit and the rate for non-firm is 9.2 US cents per unit. It also unfolds arguing, ”The low B-C ratio assumed no Afghan Transit fee, while we have agreed to 1.5 cents in this respect, which will further reduce the B-C ratio. Transit charges in Central Asia are in average of around 0.3 cents. It appears that no professional advice was available at the receiving end negotiators who apparently relied on hunch figures.”

The Ministry of Planning and Development also submitted that one should wait and explore the development of a full open access network regime where there were many buyers and sellers based on hydro and thermal sources which might result in a reasonable transmission tariff of below 1 cent as opposed to the proposed 2.91 cents, which is expected to rise exponentially in future with lesser availability of power supply as the power demand in exporting countries will increase.

In order to ensure energy availability in the later years, the exporter (Tajikistan) has demanded higher price of 5.15 cents which in the original feasibility was assumed to be 1.5 cents, mentions the Energy Wing of the ministry.

Planning and Development Ministry also mentioned that CASA-1000 was conceived to provide alternative to Pakistan obviating the need of gas import from Iran. With changing political environment and prospects of lifting of restrictions on Iran, the rationale for such projects may lose its appeal.

It went on to say that in addition, Chinese have also offered electricity exports via Khunjerab under CPEC programme. Although such an offer is at an initial stage and feasibility study is yet to be carried out, Chinese energy may not suffer from risks and instability issues as compared to CASA-1000 due to Afghanistan factor.

No wonder, project of CASA-1000 has been geared up knowing Chinese offer. And there is no collateral from the agencies which want to promote regional cooperation under CASA-1000.