Focus on hydel power generation
Focus has now been shifted on inexpensive hydel power generation from expensive thermal one to achieve optimal energy mix. A tripartite agreement has been finalised between the government of Azad Kashmir, Three Gorges Corporation of China and Private Power Infrastructure Board for the construction of 1,124 Kohala hydropower project on the River Neelum under the China-Pakistan Economic Corridor Frame Work. Construction work on three mega hydropower projects has been started in GigatBaltistan and Khyber Pukhtunkhwa.
A memorandum of understanding of Kohalahydel electricity generation project had been signed during the tenure of previous government. The agreement now marks the largest investment of $2.4 billion, which is made in IPP mode. Energy experts including a former technical member of the Planning Commission had expressed reservations against agreed capital expenditure and electricity tariff of the projects to be implemented in private sector, fearing an alarming raise in tariff, haunting circular debt and defeating the objective of clinching an optimal energy mix for boosting the economy.
A comparative data of different projects suggests that construction cost vary widely. The cost of Kohala is 3.31 times more than the reference cost of Dasu phase-1being implemented in public sector. Likewise, Azad Pattan is 3.97 times more than Dasu; SukiKinari 2.38 times and Mahal 2.50 times. Inflated capital expenditure is then reflected in per unit tariff of electricity. Massive line losses of the rag-tag transmission and distribution system, electricity theft and default of bills by influential defaulters add to power sector circular debt in a big way.
Power sector urgently needs drastic reforms, entirely aimed at lowering the electricity tariff for all categories of consumers to raise the demand for the already surplus supply and additional power generation in future. Greater focus should be on more competitive and financially viable projects of hydel, solar and wind, preferably in public sector. The Inquiry Commission Report on excessive payment to IPPs cartel and the arm-twisting tactics of its stakeholders serve a bitter lesson both for the government and electricity consumers. There is dire need of additional power generation of 10000 megawatt from renewable sources, exclusively in public sector, to realise the cherished goal of inducting low cost electricity in the national grid and ensuring smooth supply by upgrading the transmission and distribution system. Last but not the least, government will have to show spine for taking strict action across-the-board to eradicate the well-entrenched culture of electricity bills default, and power theft, otherwise the practice of hiking tariff will continue, taking a heavy toll on the economy. Review of hydel power projects that will be financed in IPP mode is inevitable.