Government All Set To Cancel Coal Power Project Because Of High Expenditures

Avatar Written by Senoria Khursheed ·  1 min read >

The government is considering canceling the project of an imported coal-fired power plant at Gwadar under the China-Pakistan Economic Corridor (CPEC). The reason is that imported fuel is costly, and the government plans to favor local resources.

Currently, the government told about its decision to sponsor the China Communications Construction Group (CCCG) project. However, the company planned to set up the plant at $542 million.

Minister Ahsan Iqbal ordered authorities to recommend alternative options after executing feasibility studies. In February, Pakistan decided to put the 300-megawatt Gwadar power plant. Among its more prioritized plans for paying invoices after beginning the project.

Besides, the government had decided to complete some plans during the first phase of CPEC (2015-2018). Similarly, the Gwadar power project was part of those plans. Therefore, the delay was due to the refusal by the Chinese insurance company to give guarantees for loans. At the same time, the refusal was due to payment problems Pakistan faced due to additional Chinese power projects. Ahsan Iqbal held a pre-CPEC Joint Cooperation Committee (JCC) meeting to elaborate on the government’s decision this week.

Meanwhile, Prime Minister Shehbaz Sharif is looking forward to arranging the 11th JCC session before going to China in the second week of November. The committee will hold the meeting virtually again. Also, the government is thinking of asking Chinese companies to either set up a power plant on solar resources or set up a coal resources plant in Thar.

Coal Power Project

Presently, the Pakistan Muslim League-Nawaz (PML-N)-led government plans to promote local coal since its idea to set up three power projects on local, imported coal eight years ago proved expensive.

The primary purpose of designing the Gwadar plant was to provide electricity to the port city. Every day, it faces 12 to 16 hours of load-shedding. Whereas, Pakistan imports that electricity from Iran. Pakistan imports nearly 70MW of electricity from Iran, and Gwadar gets about 14MW of that.

On the other hand,  the planning Minister Ahsan Iqbal ordered the Ministry of Science and Technology to work on procedural formalities. As it required to sign the agreements with the Chinese authorities for the upcoming JCC meeting.

Both countries agreed to set up six sub-working groups on communication technology infrastructure, policy and regulation, application innovation, cyber security, HR development, and radio spectrum regulation. All this happened during a Joint Working Group on Information Technology meeting.