‘BOT mode be preferred in public-private partnership’

Islamabad: Muhammad Ali Qureshi from United Nations Industrial Development Organisation (UNIDO) has said that more Public-Private Partnership models need to be explored and the projects based on Build Operate and Transfer (BOT) mode should be preferred as they are more financially feasible

Mr Qureshi was addressing a hybrid public-private dialogue on “Potential of renewable energy and hydropower development in Khyber Pakhtunkhwa: opportunities and challenges” arranged by Khyber-Pakhtunkhwa Board of Investment and Trade and Sustainable Development Policy Institute here Wednesday.

Mr Qureshi said that that the governments should provide significant facilitation for intra provincial and inter provincial political dispute resolution and coordination.

Hamayat Ullah Khan, Advisor to KPK Chief Minister on Energy and Power said that Khyber-Pakhtunkhwa is blessed with hydropower resources. All mega projects should be appraised with regards to the financial, socio-economic, and environmental factors. He observed that the constitutional framework of the hydropower sector is provided and profit sharing with provinces is necessary. This needs to be implemented for effective sustainability of the projects. According to him, hydropower is subsidising the tariff all over Pakistan for being cheaper and makes up for the high-priced thermal power.

He added that Public private-partnership is an excellent proposition. While projects in the public sector have cost and time overruns, the private sector projects have financial pressure to achieve the project objectives, but the debt equity ratio is problematic and results in longer term non-sustainability.

Mr Khan opined that hydro projects have good environmental and socio-economic outcomes. The capital expenditure is also below 20% meaning most of the resources are indigenous. This makes hydro-projects suitable for poverty-stricken province like Pakhtunkhwa.

He recommended that sustainable development in Pakistan is possible via better coordination between federating units and better facilitation and incentivisation of all stakeholders involved including provinces, displaced public and environmental resources.

Hassan Daud Butt, CEO, Khyber Pakhtunkhwa Board of Investment and Trade, in his welcome remarks stated that KPK is blessed with renewable energy sources and the same need to be harvested.

Shahjahan Mirza, Managing Director, Private Power Infrastructure Board and CEO, Alternate Energy Development Board, said that coordination between Federal and provincial governments is of paramount importance. He suggested that all projects should get No Objective Certificates from the power purchaser (CPPA) and National Transmission and Distribution Company for successful completion of the projects and achievement of the desired outcomes within stipulated timeline. He advocated that the integrated generation plan is politically unbiased and gives evidence-based planning mechanism and should be utilised for all power sector project planning.