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In the wake of the 18th Amendment, Punjab hopes to tap its power sources with the help of foreign investors and has already created a full-fledged energy department

By Waqar Gillani

Pakistan is faced with a substantial shortage in the power sector for the past two decades. There has been no significant addition to power generation in all these years despite the fact that the federation, through Water and Power Development Authority (Wapda), was fully empowered to take initiatives and the provinces were allowed to execute power projects only up to 50 Megawatts.

However, following the 18th Amendment in the Constitution of Pakistan, the provinces are, apparently, now vested with full authority to develop power projects of any capacity through public or private sectors and establish the required regulatory framework.

Legally speaking, in the past, Article 157(2) of the Constitution of Islamic Republic of Pakistan granted the right to the provinces to establish power stations and construct support infrastructure (grid-systems, transmission and distribution network etc.) and even set the tariff for the electricity that is consumed within the province. Provinces, de facto, gave up this right in the 1950s when Wapda was the central authority.

As a consequence of the 18th Amendment, the Concurrent List was abolished and Electricity was shifted to Part II of the Federal Legislative list. This resulted in some difference of opinion between the federal and the provincial entities about the right and the mandate of the provinces with respect to electricity generation. This difference of opinion on provincial mandate was referred to the Council Of Common Interests, pursuant to Article 157 (3), by Punjab and resolved in the CCI meeting of April 19, 2011, wherein provinces were given complete authority to develop power projects of any capacity themselves or through private sector.

The CCI also decided that any remaining ambiguities may be removed through necessary amendments in NEPRA Act.

As the gap increases between power generation and its demand, the provinces have already moved forward with plans. Almost all four provinces have created their separate departments of energy in the past couple of years.

“It is imperative that the provinces start their own projects but this is neither easy nor an overnight possibility,” says Syed Tanzeem Hussain Naqvi, former Member (Power) Wapda. “There are many technical, financial and policy challenges on the way.”

He says the provinces need resources and investors like China and World Bank, but these things are not practically possible with the help or involvement of the government of Pakistan. Punjab and Khyber-Pakhtunkhwa have a great deal of hydel resources and they should pay attention to engaging the right experts with effective and transparent management and execution policies. “It needs lot of capacity building. We need a line of action on war-footing basis to get some relief in the coming 4-6 years.”

Provinces, apparently, seem excited with their individual plans to generate power by alluring foreign investors. Punjab, taking the lead, has gone as far as creating a full-fledged energy department and creating Punjab Power Management Unit (PPMU) to plan, procure and implement the ADB funded Renewable Energy Projects of Punjab in the public sector. It has also established the Punjab Power Development Board through an Act passed in 2011.

The PPDB is supposed to facilitate the private investors on behalf of the Punjab government in matters related to the setting up of power projects in accordance with the policy of the government; implement the policy of the Punjab government relating to power generation and coordinate with various departments and agencies of the government in the field of power generation; issue No Objection Certificates, permission or license for use of canal or river water or land of the government for power generation; and explore potential sites for hydel and coal power.

At present, there is a demand-supply gap of about 4,000MW which is increasing at a rate of 6 per cent per annum. Punjab with 68 per cent of the consumption of generated power and gas is the worst affected and has to endure both power and gas load shedding with adverse social and economic consequences.

Punjab has so far planned to generate 1393.85MW electricity (in coming years) mainly from hydel sources while a few projects are based on solar, thermal, coal, bio gas, and wind energy systems.

In KP, the Energy and Power Department was established in November 2008. Prior to this department, the Power Sector was part of the Irrigation Department and was called Irrigation and Power Department. KP plans to generate 1322MW electricity costing (as of now) Rs222.096 in coming 10 years. Besides, most of these projects are hydel.

Korean Solar Energy Company and the government of Balochistan signed an agreement a few days ago. The Korean company shall build a 300MW power plant at the cost of $900 million in Quetta. Balochistan is the first province where solar energy electricity plant is built. The province has a shortfall of 550MW at the moment. With the implemention of this project, 300MW electricity would come to the national grid and the shortage will be reduced by 50 per cent. “We are focusing on alternative energy sources in our province,” says Hafiz Abdul Basit, principal secretary to Chief Minister, Balochistan. “The plan is to identify areas and include projects of solar and wind energy too.”

Similarly, in the recent past, a Thar coal-based 1,200MW project of Engro is expected to commence operation by April 2013 in Sindh. SECMC is a joint venture between the government of Sindh and Engro Powergen Limited, established in June 2009.

“Provinces are free to conceive and start their projects but there is a need for an institutional approach to handle these projects,” says Lt Gen (r) Muhammad Zubair, Chief Executive Officer, Neelum-Jhelum Project, commenting on the situation and the provinces’ challenge of generating electricity after the 18th Amendment.

“Wapda took years to acquire maturity in handling mega projects. It has that potential now,” he adds. “But in provinces we hardly see any capacity or capability to conceive, develop or execute mega power projects. There may be some capacity in Punjab but it’s nothing close to Wapda’s which, supposedly, should be dissolved after the 18th Amendment.”

Challenges are high, he says. “We need to develop a national approach to meet this crisis. Besides, at the moment, there is a need to give the provinces a strict deadline for their ongoing projects. Till they achieve their target, we should ask Wapda to execute mega projects in a transparent way in order to avoid conflict among the federating units.

“Until the provinces acquire technical potential, nothing positive will come about.”

Zubair says his project which is worth Rs 274.9 billion will add 969MW power in the system in the near future. “We need a strong political will and a transparent execution to counter all negative propaganda among the provinces.”

vaqargillani@gmail.com

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