Private and Public sector - Foreign and Domestic.
SOURCE: Number One News Resource of Pakistan - JANG-GROUP
ISLAMABAD: The new policy for power generation projects formally launched here on Thursday is expected to generate a lot of controversy as the present government has sought foreign investment for the construction of Kalabagh dam with an installed hydel power capacity of 2400 MW along with dozens of other hydel projects all over the country.
However, no formal date for commissioning of the Kalabagh Dam has been given in the policy document distributed during the press conference addressed by secretary water and power, Mirza Hamid Hassan.
The power policy announced by the secretary water and power said the government of Pakistan will guarantee that the terms and conditions of executed agreements are honoured. Power companies will be allowed to import plant and equipment not manufactured locally for hydel and thermal projects including projects based upon renewable resources at concessionary rates.
Companies will also be completely exempted from payment of income tax, including turnover tax, and no tax on imports. However, there will be no exemption from payment of these taxes on oil fired power projects.
To promote indigenisation, the local engineering industry will be encouraged to form joint ventures with foreign companies in order to develop power projects with a cumulative capacity of atleast 2000 MW by the year 2015
Earlier, the Secretary warned that if we do not execute the new power projects earlier, the country will be facing a huge power deficit by 2005. He admitted that though, presently, the country was producing surplus power but that would soon be consumed due to rising demand.
The secretary also spoke about the controversial power policy of Benazir Bhutto government in 1994, saying had that policy not been announced and subsequently executed, even then the country might have been facing huge load shedding today.
But, he said, this policy also resulted in tariff raise due to deals in favour of IPPs. So, he said, the policy carried both positive and negative aspects. He said, now the country is required to undertake many hydel projects to avoid the horrible scenario as after five years, the country will be facing serious power crises.
According to the policy features, reform of power sector through restructuring and deregulation is high on the agenda of the government. The GOP is committed to a far reaching reform programme of the power sector and to help meet country future power needs.
Implementation of the envisaged programme will bring about a gradual transition of the power system from integrated, state owned utilities to a decentralised system with separate generation, transmission and distribution entities, having substantial private ownership and management, reflecting and encouraging , a commercial and competitive operating environment.
The main objectives of the policy are to provide sufficient capacity for power generation, at a least cost, and to avoid, capacity shortfalls; to encourage and ensure exploitation of indigenous resources, which include renewable energy resources, human resources, participation of local engineering and manufacturing capabilities; to ensure that all stakeholders are looked after in the process ie a win -win situation for all and to be attuned to safeguarding the environment. The scope of the policy covers private sector projects, public sector projects, public private partnership and projects developed by the public sector.
On the issue of requirement of future generation capacity, the policy said, presently, the combined generation capacity available in the public and private sector is sufficient to meet the future power demand upto the year 2004-2005. However, it would require augmentation during subsequent years.