Conditional willingness from CPPCL for Gwadar power plant project

ISLAMABAD: In case the 300-MW imported coal-based project is abandoned by both the Pakistani and Chinese governments, M/s CIHC Pak Power Company (Pvt) Ltd CPPCL has shown conditional willingness to enter into a power project at Gwadar. Sources in the Pakistan Public-Private Infrastructure Board PPIB shared this information with Business Recorder.

On September 11, 2024, the review meeting chaired by the Minister for Planning, Development, and Special Initiatives noted that problems were still being faced by the Gwadar coal power project under CPEC.

CPPCL received the LoS dated August 23, 2019. A close date for financial closure was scheduled on April 23, 2020. Major issues included inordinate delay faced by the company in putting across its proposal and getting an acceptable tariff from Nepra and reluctance from lenders, issues pertaining to the lease agreements of the land with the Balochistan government, as well as environmental approvals. The PPIB has approved six extensions for the FC and has further provided a deadline of December 31, 2024.

However, CPPCL has yet to submit its extension fee to amend its LoS while major construction activities have yet to start at the project site, since the starting ceremony was held in November 2019. While security package agreements were inked in April 2021, which had promised the commencement of immediate construction work, the project has remained in limbo.

The meeting in January 2023 to give the construction work a kick off did not resume any site activities. The government remains supportive of CPPCL, especially in tariff determination process, as Nepra finally hiked the tariff up to 9.0818 cents/kWh during May 2024. CPPCL does not appreciate this and is yet to invoke Appellate Tribunal of Nepra for further hike in the tariff.

The PD&SI minister asked CPPCL to decide on its future or propose an alternative within 15 days of the visit in July 2024. CPPCL could not produce acceptable responses as requested, and the response it put forward on August 13, 2024 was unsatisfactory as there was no action plan.

On 20 August 2024, the minister met again to discuss the status of the project and sought CPPCL’s formal position regarding the project. On 13 September 2024, CPPCL reaffirmed its concerns about the tariff and asked both governments to come up with an alternative proposal in case the project were to be shelved. CPPCL reaffirmed its interest in seeing the development of this strategically important CPEC coal power plant at Gwadar.