ISLAMABAD: The government’s bid to set up a major Liquefied Natural Gas (LNG) power project — scheduled for electricity generation by March 2018 — on a war footing has failed to take off due to zero investor response.
“The project has been shelved,” a senior government official said, adding the development had been reported to the board of directors of the Private Power and Infrastructure Board (PPIB) led by Minister of Water and Power Khawaja Asif last week.
The government had announced on Oct 28 last year that it was inviting bids for a 1,200-megawatt LNG-based power project at Muzaffargarh as a contingency to ‘ensure loadshedding-free Pakistan by 2018’.
No bids were received for the project that was supposed to ‘ensure loadshedding-free Pakistan by 2018’
The last date for submission of bids was set as Dec 5, 2016 which was later extended for 15 days to Dec 20 on the instructions of Prime Minister Nawaz Sharif.
PPIB spokesperson Sami Rafi Siddique said that no bids were received for the project. “PPIB does not have any further instructions,” he added.
Informed sources said PPIB’s managing director had even conducted a pre-bid conference with a reasonable number of investors and about 7-8 of them even purchased documents required for bidding but none submitted a bid.
“The project was not based on prudent decision and timeline was too short,” said an investor who purchased bid documents.
Another source said the straitjacketed bid schedule was given for the project on signals from an investor that a refurbished set of turbines were ready to be mobilised but this did not materialise.
The project was offered to investors following a policy change in the first place because the government considered its fast track development would cover slippages on the target to end loadshedding by 2018.
The PML-N had come to power on the promise of ending power shortages in the country within its five-year term.
The project was conceived when it dawned on the government that 1,450MW Tarbela 4th Extension had been delayed beyond its completion deadline but was within the 2018 target timeline, but the strategic 969MW Neelum-Jhelum hydropower project could still not be relied upon because of its challenging geographic and hydrologic nature.
Therefore, the Cabinet Committee on Energy (CCoE) headed by the PM wanted to ensure without any doubt that enough project capacity was available before the next elections to end even slightest of shortfall.
The project was to be located in Muzaffargarh, near the existing thermal power station, having gas turbines based on combined cycle technology. The power plant was targeted to have minimum annual availability of 92 per cent.
The capping orders had been issued when realised that the government had already contracted power projects that were enough not only to meet power shortages but also provide reasonable surplus reserve. It was reported that 2,632MW of new hydropower plants and 3,960MW of coal-based power plants (both local and imported) and other renewable energy projects already under construction would bring in 13,207MW of new generation capacity by the end of 2018. This is “sufficient not only to meet our power shortages, but also to provide comfortable spinning reserves”.
The orders said the “power generation already financed and under various stages of execution will also bring further capacity of 20,380MW by 2022, bringing the total installed capacity to 53,405MW”.
