ISLAMABAD: While bowing before pressure from Beijing, Islamabad has reportedly decided not to change the location of 300-MW coal-fired power plant from Gwadar to Thar, in addition to allowing a three-year extension in its financial close, well informed sources told Business Recorder.
Chinese leadership, sources said, conveyed to Prime Minister Shehbaz Sharif during his last visit to Beijing that relocation of coal-fired power plant from Gwadar to Thar means a new project which China is not ready to do as it has taken a principled decision not to start any new coal project.
As the Prime Minister returned from Beijing, Chinese Ministry of Foreign Affairs sought written assurance from Islamabad that the latter will honour whatever commitment Prime Minister made with the Chinese leadership.
During a meeting on CPEC project presided over by the Prime Minister, Finance Minister Ishaq Dar reminded the participants that the decision needs to be taken on the 300-MW Gwadar coal power project, adding that the issue is outstanding and Chinese side continues to highlight it. Tariq Fatemi, SAPM, also stressed early resolution of the matter. Prime Minister desired that Minister for Planning should expeditiously decide the matter within the CEPC Framework Agreement, keeping in view the overall strategic cooperation between the two countries and extraordinary support provided by China.
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Private Power & Infrastructure Board (PPIB) which was pressing the Chinese company to relocate its project from imported coal at Gwadar to local at Thar, opted to remain silent, the sources added.
Project is listed as priority project under CPEC Energy Agreement. Unveiling ceremony of the project was carried out on August 13, 2017 while its commencement ceremony was held on November 4, 2019. The work was suspended due to the pandemic and planned relocation to Thar. The construction period of the project is 30 months. The project is aimed at improving the reliability of the local power supply that would help gradually solve the problems in the ongoing economic development and urbanisation of Gwadar Free Zone.
At a recent meeting presided over by Minister for Planning, Development and Special Initiatives, AhsanIqbal it was revealed that all major projects under CPEC in Gwadar and adjoining areas like NGIA, desalination plants, Pakistan-China Friendship Hospital, Pakistan –China Technical and Vocational Training Complex, University Gwadar, as well as, planned projects like Gwadar Oil Refinery, Gwadar Shipyard have a cumulative power requirement of more than 800 MW. The sources maintained that relocation of the project to Thar, as well as, use of local coal is not viable due to long logistic lines and cost-benefit analysis including poor yield, high volatility, frangibility, etc. and environmental concerns associated with local coal.
The Planning Minister was further informed that such re-location of approved project is contrary to Chinese policy as no new coal project can either be developed or financed. The current project is being developed given the strategic objectives in Gwadar and dictates of Gwadar Smart Port City Master Plan.
Copyright Business Recorder, 2023