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Money Matters

A mega mess

By Hussain Ahmad Siddiqui
Mon, 07, 16

ENERGY

The strategy of National Power Policy 2013-2018 focuses on shifting the energy mix towards low-cost resources such as hydropower, in the long term, and targets reducing electricity demand-supply gap in the short term. Implementation of the two extension projects of the existing 3,478MW Tarbela Hydropower Station serves well to achieve these goals to a great extent.

The under-construction Tarbela Fourth Extension Hydropower project of 1,410MW installed capacity is scheduled for completion by June 2017, whereas physical work on the Fifth Extension project will commence shortly, which, on completion will add another 1,410MW installed capacity to the power station. Resultantly, Tarbela powerhouse would have cumulative installed capacity of 6,298MW within few years, and would thus provide around 20,000GWh clean and inexpensive energy to the national grid annually. The existing Tarbela and Ghazi Barotha 500kv transmission lines network is capable, and will be used for dispersal of power from Tarbela Fourth Extension project, while studies are in hand by the National Transmission and Despatch Company (NTDC) for evacuation of electricity from the proposed Tarbela Fifth Extension project.

Multi-purpose Tarbela Dam, one of the largest dams in the world, was built having five outlet tunnels and two spillways, with the primary objective of irrigation water supplies, though electricity generation is an important secondary function. Three tunnels known as Tunnel Nos 1, 2 and 3 were dedicated to hydropower generation, while Tunnel No 4 on the right bank and Tunnel No 5 on the left bank were designed and constructed exclusively for irrigation releases, as per the original scheme. A total of 14 units of various power generating capacities were installed on Tunnel Nos 1, 2 and 3, in three phases, during 1977-1993. The powerhouse, which already delivers about 50 percent of Pakistan’s total hydropower generation, is well maintained, and has recently been refurbished and modernised with the $16.5 million financial assistance of the USAID. The rehabilitation project has restored 128MW installed capacity that was lost over a period of decades due to depreciated machinery and equipment, besides enhancing lifespan of the plant.

The idea of utilising Tunnel No 4 for power generation was conceived as early as in the 1980s. Subsequently, the power optimisation study at Tarbela project determined that Tunnel No 4 could also be utilised for power generation without affecting irrigation releases. After initial studies, Water and Power Development Authority (Wapda) commissioned in May 1990 its consultants Chas T Main International Inc, (USA) and NESPAK to prepare an inception report on techno-economic viability of the proposal. The report, which was finalised in October 1992, confirmed project pre-feasibility, suggesting an additional power generation of 960MW (two units of 480MW each). The project cost was estimated $324.5 million at that time.

Nonetheless, this study was considered grossly deficient by the Wapda experts’ committee as safety and operational requirements of Tarbela Dam in the long run were not duly addressed.  Also, the surplus water for the fourth extension power generation was available only for 100 days a year, and Tunnel 4 restricts the maximum discharge and power output for power generation. For long, therefore, there was no headway to conduct a detailed feasibility study, an essential component of developing any hydropower project. It was only in 2002 that the 960MW Tarbela extension project was included in the Power Generation Policy 2002 as a project to be developed by the private sector. Subsequently, ALSTOM of France was issued letter of interest (LOI) by the government in June 2002 for conducting the project feasibility study within nine months. However, the international group declined in December 2002 to fulfil the conditions of the LOI.

Later, Mira Energy Ltd in 2004, and a consortium of AXOR (Canada) and Samama (Saudi Arabia) in 2006, had shown interest in conducting a bankable feasibility study under the policy framework. But, finally, Wapda decided to construct the project on its own, in public sector. This was due to anticipated problems of sharing the existing main structures of dam, tunnel, switchyard etc, available infrastructure at site, and other common facilities, besides the strategic security issues, which were not envisioned by the government earlier. Detailed project study by the consultants, who were appointed by Wapda under the World Bank funding, confirmed feasibility of installing three turbines of 470MW each on the existing Tunnel No 4, with total 1,410MW power generation capacity.

Tarbela Fourth Extension project was approved by the ECNEC in August 2012 at a total cost of $928.90 million, to be completed within 3-1/2 years. World Bank is financing the project through concessionary and commercial loans of $440 million from IDA and $400 million from IBRD, while local portion of the project cost is being provided by Wapda/government of Pakistan.

In September 2013, construction contract was awarded to Sinohydro of China at $309.60 million. The main civil works for project is limited to modification of intake structure, construction of powerhouse, penstock and extension of 500kv switchyard. A joint venture of Voith Hydro’s German and Chinese companies is installing powerhouse machinery, which includes turbines, generators, transformers and allied accessories, at $431.50 million.

Contractually, the project was scheduled for completion by February 2018, however, initial pace of construction work was slow due to some snags, and the project remained behind the schedule. Lately, Wapda has given a variation/additional order of $51 million to the contractor to fast-track the project under accelerated implementation programme approved by the government. Consequently, it is now rescheduled for commissioning by June 30, 2017, advancing the original completion schedule by eight months. However, the project is likely to be delayed, given the present conditions of high water flows in Indus River at Tarbela Dam and track-record of the contractors. Reportedly, the contractor has already demobilised.

The proposed Tarbela Fifth Extension Project envisages installation of three units of 470MW each using Tunnel No 5. Currently, PC-1 is under review by the Planning Commission, whereas detailed engineering design has been completed and bidding documents are in the final stages. Project cost is estimated as $796 million. The World Bank has agreed to provide initial funding of $326 million, out of which $126 million has been committed out of the loan for Tarbela Fourth Extension project, which is being spent on consultancy services for the proposed extension. The project is expected to achieve commercial operations in March 2020.

Interestingly, Indus River System Authority (IRSA) has allowed Wapda to convert and use these two Tarbela irrigation tunnels for power generation, without addressing vital related issues. In fact, Tunnel Nos 4 and 5 are also used as spillway during peaking season at Tarbela to spill out the floodwater and flushing of sedimentation. Tarbela reservoir has already lost about 35 percent of its live storage capacity as a result of sedimentation over a period of decades. Also, there might be problems faced in the looming flood season due to increased flows in Indus River beyond estimates.

The writer is ex-chairman of the State Engineering Corporation