New Govt setting up company to generate $355m for 525MW power plant

ISLAMABAD: The government will set up a special purpose company to generate financing worth $355 million from both local and foreign financial institutions for carrying out the 525-Megawatt gas based thermal power plant at Chichoki Mallian, sources told Daily Times here on Tuesday.They said that cost of the project is $355 million that was negotiated between Pakistan Electric Power Company (PEPCO) and Chinese company Dong Fong. They said that a special purpose company would be set up to generate financing of $355 million from local as well as foreign banks.At present the country is mainly depending on hydel power generation and due to water shortage the hydel power generation has dropped to around 2300 MW per day from 3200 MW. The officials are of the view that the country would be facing around 1400 MW power shortfall by 2010.At present the thermal power generation stands at 4800 MW by IPPs and 3000 MW by Wapda. After the completion of the thermal power plant at Chichoki Mallian, 525 MW thermal power would be added to the national power system in the next two years. Sources said that the cost of electricity generated through the project would stand at $0.67 million per MW and added that it would be the lowest cost than the electricity generated through Independent Power Producers (IPPs). They said that the cost of electricity generated through IPPs was $1.2 million per MW.Sources further said that the plant would be operated on gas and the per unit cost of the electricity generated through Chichoki Mallian thermal power plant would be 5.35 cents per unit or Rs 3.31 per unit. Sources also informed that PEPCO was receiving power from HUBCO at 17.50 cents per unit or Rs 10.40 per unit. “By setting up 525 MW gas based thermal power plant at Chichoki Mallian, public sector will be able to provide electricity at cheaper rates than the electricity being provided by IPPs, sources added. He said that the project would be completed within two years by 2010.They said that 450 MW power project at Nandipur (Gujranwala) was also being set up by public sector at the cost of $ 329 million and 525 Megawatt gas based thermal power plant at Chichoki Mallian would be the second project that would be owned by public sector.Chinese company Dong Fong Electric Corporation has already completed the hydro power plant at Ghazi Barotha project that is delivering 1450 MW power. The company is also recently working on five other power projects of 869 MW. A 4-member Chinese delegation headed by Si Zefu, Chairman M/S Dongfang Electric Company called on Federal Minister for Water and Power Raja Pervez Ashraf here on Tuesday. The minister invited the firm to participate in the power sector and asked to complete the projects by the company in Pakistan in the stipulated time.The minister said “we recognize the professional experience of the company and expressed the hope that the Chinese government would extend its support and assistance enabling Pakistan to overcome the power crisis. The Chairman of the Company said that his company is well aware of the power situation in Pakistan and assured that it would complete the project as per schedule.