Pakistan Muslim League Nawaz government is mulling an offload of Haveli Bahadur Shah and Balloki LNG plants to private investors as Prime Minister has constituted a high profile committee with mandate to submit proposals regarding deregulation of electricity generation.
Well-placed sources disclosed to this reporter that privatization of two Liquefied Natural Gas (LNG) power plants was on the cards as a last resort to get 2470 mw LNG power plants up and running before the expiry of the constitutional tenure of the incumbent regime.
They said “Premier Nawaz Sharif has directed the Secretary Water and Power to collect data on the financial impact associated with the deregulation of electricity generation and also submit proposals regarding deregulation of electricity generation”.
During the Cabinet Committee on Energy (CCE) meeting held on September 15, Secretary for water and power stated that matters relating to privatization fell under the domain of the Privatization Commission and therefore, matters relating to the offloading of the Haveli Bahadur Shah and Balloki LNG plants may be referred to that ministry.
“The Committee (CCE) was of the view that this project had a great potential to attract foreign investment. Hence, the traditional approach for its offloading should not be pursued,” sources said, adding that CCE further directed the Secretary to have a meeting with the Minister for Finance for exploring possible options -such as creation of a special cell- for offloading of Haveli Bahadur Shah and Balloki LNG plants and prepared a RFP in light of his advice and submit the same to the Cabinet Committee on Energy.
The sources further informed that the premier has constituted another high profile committee under the chairmanship of Minister for Finance Ishaq Dar, while Minister for Water & Power, Secretary to Prime Minister and Secretary, Ministry of Water and Power have been tasked with exploring the possibility of resolution of the issues related to idle power plants and submit a report to the Cabinet Committee on Energy (CCE).
Sources also informed that delivery of gas turbines by the General Electric Co. (GE) for two LNG power plants in Haveli Bahadur Shah and Balloki had been delayed by approximately 3-4 months. Therefore, these projects would not be operational before summer 2017. As per new timelines, completion of the 1st units of Haveli Bahadur Shah and Balloki power plants would be achievable before August 2017
It is worth mentioning that the two LNG power plant projects worth around Rs 170 billion of approximately 2470 megawatt are located in Punjab; they have been initiated by the federal government to help ease the shortfall. They are being developed by the National Power Park Management Company Limited, which is wholly owned and controlled by the federal government, and are being financed through the Public Sector Development Programme.
The LNG power plants on completion will consume imported LNG as fuel for power generation and might not start complete electricity generation as per installed capacity before June 2018.
However, the incumbent government -which has put the 6,600 megawatts Gaddani Power Park project on back burner by placing the entire project on low priority-, might face embarrassment as these two LNG power plant projects are faced with delay.
Although the government has given priority to these two LNG power plant projects yet they might not bear fruit before the end of the tenure of the present rulers. Also, privatization of these two LNG power plants was taken as alternate option to operationalise these two power projects in time. The PML N government is eager to make these two power projects operational before the expiry of its constitutional tenure.