6,600MW coal-based $12 bn Gaddani power project shelved

ISLAMABAD: The government has shelved its flagship and much-touted $12 billion Gaddani coal power project of 6600 MW as the government has failed to arrange $1.5 billion to build the jetty and the required infrastructure to cater to the needs of 10 coal-based power plants in the park.
“Yes, the Prime Minister has accorded approval to the shelving of the project on the summary sent by ministry of water and power,” a senior top official at the ministry confirmed to The News. He said that in the summary it was also recommended to merge the Pakistan’s Power Park Company of Gaddani with Private Power Infrastructure Board (PPIB) so that in future any private party, if it wants to invest in the Gaddani project, should contact PPIB.
Spokesman of the ministry, when contacted, said that the government has withheld sanctioning of allocation for building the jetty and the infrastructure. He said the master plan of Gaddani has been scrapped as it was made keeping in view 10 power plants each having capacity to generate 660 MW. Now the master plan will be modified after knowing how many power plants will be installed by the private sector.
He said that the funds now would be released for the jetty after the decision as to how many power plants will be installed in the Gaddani Power Park. Initially 10 power plants were to be installed of which 8 were to be established by the private sector and two by the government. Later on the government decided to abandon its two plants owing to non-availability of funds. Then the private sector also started dragging its feet in view of the delay in building the jetty and some of them agreed to install the power plants of just 2400 MW. PPIB has short-listed 6 companies. He said then the government decided to build the jetty as per the new decision to be taken keeping in view the concrete investment proposals received by PPIB. So the government has decided to modify the master plant and the jetty will be constructed only when there are concrete proposals for investment.
The spokesman, while insisting that the project has not been abandoned, nevertheless agreed that the project is no more on top priority of the government. However, the top official of the ministry said that the state-owned Chinese companies are reluctant to invest in the project ostensibly keeping in view the political instability, but the Chinese top authorities are geared up to invest in the fast track projects of the country. However, the sources said that Pakistan has failed to develop the jetty and the required infrastructure at Gaddani for installing 10 coal-based power plants, which is why the Chinese companies are shying away from investing in the coal power park.
The Nawaz government in 2013 had initiated coal-based power park at Gaddani and the prime minister was very upbeat about the mega project, which was scheduled to come on stream in 2017. To complete this project, the government had constituted the Pakistan Coal Power Park Committee.
Under the project 10 power plants were to be installed each with capacity to generate 660 MW and to this effect the Chinese companies had planned to invest about $8 billion. However, the project cost hovered around $12 billion including the cost of infrastructure such as construction of jetty. The official said that about $1.5 billion investment was required to complete the jetty at Gaddani and without the jetty and the required infrastructure no company was willing to install the power plant there, which is why the project was virtually put on hold at the very outset.
However, apart from coal-based power plant at Qasim Port, coal based power plants at Jamshoro, Hubco, Sahiwal and Thar will be completed. Port Qasim plant will generate 1320 MW of electricity, Jamshoro power plant 1320 MW, Sahiwal power plant 660 MW and Thar coal-powered plant 1860 MW. Old IPPs are also being converted to coal.