Several projects under CPEC delayed, on verge on being axed

Islamabad, Aug. 10 : Within less than two years of the launching of the 46 billion dollar China Pakistan Economic Corridor (CPEC), several projects today are facing delays or are in danger of being closed.

One such project is the 870-megawatt Suki Kinari hydroelectric power project, part of CPEC which is valued at USD 1.8 billion.

The project may be delayed by at least one year as the Khyber Pakhtunkhwa government has so far failed to resolve the land acquisition issue, the Express Tribune reports.

Another is the Punjab-based 330MW coal-based power project. A major Chinese firm bowed out of the USD 590 million mine-mouth project that was scheduled to start electricity production by end-2017.

The project was a key component of the high profile CPEC launched last year by President Xi Jinping and Prime Minister Nawaz Sharif.

The China Machinery Enginee-ring Corporation (CMEC) has lost interest in the project because of issues relating to feasibility of producing enough energy for running the project.

Another reason was the tariff allowed by the National Electric Power Regulatory Authority (Nepra) that was lower than its expectations.

The Dawn quoted Sami Rafi Siddiqui, spokesman for the Private Power and Infrastructure Board the one-window organisation for private power projects, as saying that the project was not moving.

Similarly, reports also suggest that five CPEC energy projects worth around USD 7 billion are at risk of being axed due to slow pace of their development.

While one project relates to mining coal in Thar, the remaining are power plants which are listed to generate 4,620 megawatts of power.

Four of these projects fall under the 'priority' schemes category and have to be completed by December 2018.

But if the decides to drop these schemes from CPEC, Sindh's share in the mega project is said to fall from USD 11.3 billion to roughly (Dollar) 6.7 billion and Balochistan's share to fall around USD 7 billion.

The projects reportedly facing the axe are four Sindh-based schemes, including the Engro surface mine in Block-II of Thar Coal with a capacity of 3.8 million metric tonnes per annum, the 1,320MW Engro Thar coal-fired power plant, the 1,320MW Sino-Sindh Resource Limited Power Plant in Thar Coal Block-I, and the 1,320MW Thar Mine Mouth Oracle coal-fired power plant.

The water and power ministry has directed sponsors of these projects to complete them by the December 2018 deadline.

If not they would face ejection from the multibillion-dollar project. Even the (Dollar) 2.1-billion, 878-kilometre-long Matiari-Lahore Transmission Line planned to supply 4,000 megawatts of electricity produced from coal in Sindh to cities in Punjab under the CPEC is said to have become unviable reportedly owing to the government's decision to give priority to power projects in Punjab.

Officials of the ministries of water and power, and planning and development owing to delays in commissioning of power generation projects in southern parts said there would not be much load available to lift from Sindh, raising question mark over the feasibility of the project.

The scheme was among the priority projects that Beijing and Islamabad wanted to complete by December 2018 in the first phase of the CPEC construction.

The officials initially said that the government planned to give high priority to coal-based power plants in Sindh and transmit electricity to Punjab.

However, the priority has shifted to three LNG-based, 3,600MW power plants that are being setup in Punjab and a 1,320MW coal-based plant in Sahiwal.

Source: ANI