ISLAMABAD-National Transmission & Despatch Company (NTDC) has revised upwards its Transmission Investment Plan (TIP) for the fiscal years 2023 to 2025 by Rs140.78 billion, taking it from the earlier proposed Rs369.22 billion to Rs 510 billion, as National Electric Power Regulatory Authority (Nepra) has raised serious concern over low investment of 2 percent in Balochistan province.
In a public hearing, Nepra said that the investment plan submitted by the NTDC seems to “unrealistic” to address system constraints that have resulted in blackouts in the country. The regulator noted that the system in the south region had collapsed several times, due to constraints, which had resulted in blackouts and said that the investment should be focused on the removal of such constraints there. Transmission Investment Plan (TIP) seemed to be lacking to propose investment in the south, Nepra noted.
While briefing the hearing, NTDC official claimed that for three years the investment outlay is being increased from Rs 369.22 billion to Rs 510 billion. Under the investment plan, 99 projects will be executed to enhance the transformation capacity by 55pc or an addition of 35000MVA, while the length of transmission line will be increased by 30pc or 6500km. Under the TIP, 30 projects of power evacuation will be executed with the cost of Rs 277 billion that accounts 54pc of the total investment plan, 51 projects will be launched for constraints removal/system expansion worth Rs 173 billion or 34pc, 5 projects of Special Economic Zone worth Rs 30 billion or 6pc and 13 other projects worth Rs 30 billion or 6pc.
As per the plan, NTDC planned 46 projects costing 178 billion in Punjab province that account for 35pc, in Sindh it proposed 15 projects costing 43 billion accounting for 9pc, in KP 18 projects of 224 billion or 44pc, Balochistan 8 projects of 12 billion with 2pc share, while 12 projects spread across multiple provinces worth Rs 53 billion with 10 percent share.
The hearing was informed that 52 projects worth Rs 445.330 billion will be funded through foreign funds of PSDP, 8 projects will be funded through PSDP grant & CDL projects worth Rs 36.985 billion and 39 projects worth Rs 27.790 billion from NTDC own resources. According the NEPRA, NTDC is facing a cost overrun of Rs 180.382 billion in 42 projects. However, NTDC argues that the actual overrun is Rs 27.6 billion after accounting for foreign exchange component indexation and PC-I revision. The causes for these overruns include significant dollar escalation and projected future expenditures on projects yet to start. It noted that provincial governments had approached regarding constraints and therefore, they should be consulted regarding this investment plan. In a plan submitted to Nepra, the National Transmission & Despatch Company (NTDC) has announced a significant revision in its Transmission Investment Plan (TIP) for the fiscal years 2023 to 2025.
Nepra has shown concern over low investment of 2 percent in Balochistan province where darkness prevails on night map due to less supply of electricity. People of Balochistan would pay the cost of the projects in the tariff along with electricity consumers in other provinces of the country. NTDC informed that the projects had already been identified to remove system constraints but those projects had not been implemented. Regarding the demand forecast, they said that representatives of the provinces had placed demands to finalize investment plan. However, the power regulator said that there were voltage and grid establishment issues in Balochistan that were not resolved. It observed that investment plan should be finalized keeping in view the system integrity, reliability and sustainability for uninterrupted power supply to the customers. The regulator was informed that a critical component of NTDC’s strategy is the Transmission of Electricity (Right of Way) Bill.
This draft legislation, prepared by NTDC’s Law Directorate, aims to address various issues including crossings of railways, national highways, and motorways. The bill, which is currently pending legislation, has been forwarded to the Ministry of Energy for tabling the parliament. It was informed that the Transmission Investment Plan is closely aligned with the Transmission System Expansion Plan (TSEP), where each project is technically justified. This plan takes into account the demand forecast of each distribution company (DISCO) and coordinates with them for proposing projects. The planning process adheres to the stipulations of the Grid Code 2023. The investment plan encompasses various critical transmission projects, including power evacuation schemes for upcoming generation projects, system reinforcements, and stability improvements.
However, NTDC faces challenges regarding Right of Way (RoW), encountering resistance from Project Affected People (PAP), historical lack of compensation policies, and inadequate legal frameworks. These issues have led to delays in project completion, penalties, loan issues with lenders, and increased project costs. NTDC’s investment plan includes vital constraint removal schemes, highlighting projects such as the 500kV Gatti, Muzaffargarh, Multan, 220kV Sarfaraz Nagar, and addressing under-utilization issues of HVDC and power plants in/from the South.
However, the financial impact of these system constraints cannot be precisely determined due to operational dependencies like fuel cost variations and actual generation dispatch. A significant factor affecting the project costs is currency devaluation, with a notable foreign exchange component in project costs. The depreciation of Pakistani rupee against the US dollar has led to substantial increases in project costs over various time frames.