State-run mini power projects unsustainable: expert

LAHORE: Former chairman Water and Power Development Authority (WAPDA) previously also worked as chairman Railways. The Khyber Pakhtunkhwa (KPK) government appointed him chairman Pakhtunkhwa Energy Development Organisation. However, he resigned in protest against the KPK policy of building unsustainable micro hydro-electric projects. Here are excerpts of his interview with The News.

Q: why do you oppose building of micro hydroelectric projects?

A: I am not against building of such projects but these very small micro projects should be built and maintained by nongovernmental organisations (NGOs). It is simply not possible for the state to undertake projects of few kilowatts to 100 kilowatts. The proposed 500 micro hydro-electric power projects to be built at loan of $300 million from Asian Development Bank (ADB) would cumulatively produce only 35 MW. The investment is not worth it. The average life of a micro hydroelectric project is 5-7 years after which the locally fabricated machines become redundant. The ADB established several micro hydroelectric projects in Azad Kashmir in 1986 and none of which is operative now.

Another drawback in this regard is that the power from most of these projects would be supplied to the nearby villages. It would not be commercially viable for PEDO to maintain these small projects and collect bills from the consumers. Moreover the projects would become redundant in few years that would be wastage of precious money and time.

Q: How could the NGOs operate these projects successfully?

A: Agha Khan Rural Support Program is operating the micro hydro-electric projects successfully through the local communities. The local communities are trained to operate the project and elders of the community collect enough power rent from the residents to maintain the micro transmission lines and the machinery installed at the project. Since the project serves the community, the elders ensure that it operates smoothly. If they fail to collect the payment in time the project is closed. The NGOs arrange funding for these small micro hydroelectric projects from the donors. They do not have to return the loan. But when government obtains loan it has to return it with interest. Given the inefficiencies in the public sector these 500 micro hydroelectric projects would create debt trap for the KPK government.

Q: What should the KPK do to ensure uninterrupted power to its public in far flung areas?

A: The highest priority should be given by PEDO to flood control, water storage and power generation of 840 MW by building Munda-Mohmand dam in the Mohamand Agency. The provincial government could inject $300 million loan it intends to take from ADB as equity and rest of the resources could be easily arranged from multilateral agencies. It would be advisable to let WAPDA undertake this project instead of private sector.  As far as dam construction is concern, WAPDA has the best expertise in the region.

However if there is any delay Fata Secretariat and KPK should initiate the project. Some European banks and Chinese investors under CPEC have already offered to provide the loans.

Q: There are some larger hydro-electric projects that have been completed with much fanfare?

A: Ranolia and Machai hydroelectric projects were completed in mid 2015 at highly inflated rates but transmission line to connect it with national grid were never erected due to dispute with PESCO. PEDO is incurring a loss of Rs40 million/month on wasted power for last 16 months. The transmission line could have been erected by PEDO at less than Rs20 million.