ISLAMABAD - PML-N government, ostensibly upset by rising power generation cost which usually leads to high power subsidy, has adopted a new course of action for power generation policy by deciding to launch four new schemes of converting furnace oil/gas based plants into coal including two new coal based power plants at a cost worth Rs 252.23 billion with assistance of Asian Development Bank (ADB).

As per total estimated cost of the schemes, the ADB would provide Rs 77.6 billion out of total Rs 97 billion to convert two furnace oil/gas fired boilers to coal of 1350MW units 1-6 Thermal Power station Muzaffargarh and 450MW units 1-2 Thermal power station Jamshoro. Government has allocated Rs 2.7 billion for these two schemes in upcoming budget. In addition to these projects, government plans to install two new coal-fired power plants with 660MW generation capacity each at cost of Rs 155.23 billion. ADB will provide Rs 124.1 billion from these two projects.

Officials of Ministry of Water and Power said that government would save Rs 100 billion on account of circular debt if coal based power plants projects are completed.  The PML-N government has allocated Rs 169.16 billion for power sector. Out of it, federal government will provide Rs 51.44 billion, Rs 86.24 billion would be generated by NTDC/PEPCO from their own resources and Rs 33.7 billion through foreign lenders.

Government has allocated Rs 17 billion for land acquisition of 4500MW Diamer Bhasha project in the next budget. Government has allocated Rs 8.15 billion for construction of Bhasha dam Lot 1-5. In addition to it, an amount of Rs 1.74 billion has been allocated for 4320MW Dasu Hydropower project which is being pushed by World Bank. Donors including World Bank are pressing Pakistan to shelve Bhasha dam project and instead are willing to provide funds for Dasu hydropower project.

The government has allocated Rs 10 billion for 425MW Nandipur power project. Its total cost has gone up to Rs 57.38 billion against earlier estimates of Rs 23 billion. Finance Minister Ishaq Dar said that cost of the project had increased as machinery was pending at Karachi port for the last three years. He said that project would be completed in next 18 months and added that action would be taken against the people involved in this negligence.

Government is working on Chashma 3 and 4 nuclear power plants with assistance of China. Government has earmarked Rs 315 million for interconnection of these plants. Total cost of the project is Rs 3.15 billion. Government has set aside Rs 50 million to conduct feasibility study for dispersal of power from imported 100 Megawatt power from Iran.

Interestingly, not a single penny has been allocated for Iran-Pakistan gas pipeline project by the PML-N government.