MUSHTAQ GHUMMAN

ISLAMABAD: Planning Commission has reportedly raised a volley of questions on viability of Chashma Nuclear Power Project-5 (C-5) including its approval by the Prime Minister and substantial revised cost, well informed sources told Business Recorder.

According to the PC, it has been observed that the project in not in line with the vision set by National Electric Policy 2021 which entails optimal utilization of indigenous resources whereas it has been mentioned in PC-1 that nuclear option is presently based on imported technology and fuel.

PC, in its observations, has said that Pakistan Atomic Energy Commission (PAEC) has submitted unsatisfactory compliance to the decisions of pre-CDWP meeting held early this year. PAEC has been asked to submit updated status on compliance of pre-CDWP decisions.

PAEC has once again been directed to approach CPPA-G in the light of pre-Central Development Working Party (pre-CDWP) decision taken early this year to analyse the impact of the project on national tariff (cost of generation) compared to least-cost generation plan and submit it to the Energy Wing of Planning Commission.

PAEC will approach National Transmission and Dispatch Company (NTDC) in the light of pre-CDWP decisions to pre-site wise power evacuation analysis for C-5 and K-4 nuclear power plants (NPPs) and a ballpark cost for upgradation/ augmentation of transmission infrastructure in both cases if the project is processed as a strategic project at this site, irrespective of the cost and to provide overall impact on power dispatch, merit order and capacity utilization of other base load power projects. The sources said, PAEC will approach Power Division in light of pre-CDWP decisions to submit government’s approach policy on strategic projects including the definition, approval process, and competent forum for making such decisions and also submit the approved National Electricity Policy (NEP) directions on strategic projects and share the list of approved strategic power projects in the country.

Planning Commission observed that PAEC had increased the cost of project from Rs492 billion (as of original PC-1 submitted to Planning Commission in 2018) to Rs689 billion (as per updated PC-1 received on December 2020). The sponsors have further increased the cost of PC-1 to Rs767.575 billion in the revised PC-1. The sponsors will have to justify and provide reasons for increase in cost of in-quantified terms along with a cost of comparison table incorporating cost items under original 1st revised and 2nd revised PC-1.

PC has maintained that one of the aims of power sector policy is to reduce tariff to keep energy affordable. If the tariff of the project comes to be high as compared to recent development of low tariff in renewable sector, what will be the other feasible option in case the project is rejected due to high tariff? Further the sponsor may clarify that power produced by C-5 will be procured by the CPPA-G. Power Division, CPPA-G has been taken on board for power purchase. The sources said, page 18 of PC-1 notes that two 500 kV outgoing lines and one 220 kV standby power transmission line will be used for power evacuation of the project. PAEC has been directed to clarify if NTDC has been taken on board for power evacuation plan of the project and furnish its current status.

The cost of the project is Rs767 billion which should be based on feasibility study and detailed engineering design. PEAC should confirm whether feasibility study of the proposed project has been carried out and duly validated by the third-party panel of experts or otherwise.

According to the PAEC, China Zhongyuan Engineering Corporation (CZEC) will be the contractor for the project and foreign aid part of the project will be funded as supplier’s credit from CZEC. The sponsors during the pre-CDWP meeting revealed that the contract agreement was signed on the directions of PM Office. However, despite pre-CDWP decisions, the sponsors have not provided copy of the directions of PM Office. The sponsors have proposed financing of the project from local loan including IDC of Rs1.092 billion, GoP foreign exchange loan including IDC of Rs730 million, Chinese supplier’s credit of Rs526 billion and equity of Rs240 billion. The sponsor has been asked to provide consent of Chinese loan, confirm sources of local and foreign exchange and inform the capacity of PAEC to finance the equity from its own resources.

The sponsors previously claimed that C-5 contract was signed on November 21, 2017 after due approvals from Prime Minister on October 17, 2017, i.e., six months before the CDWP meeting held on May 24, 2018 in which sponsors were directed to submit a letter of apology for fixing the local portion - 18 per cent of the main exchange rate of China and paid in Pak Rupees.

According to PAEC, it intends to add 8800 MW power to the national grid by 2030 and envisages about 40,000 MW installed nuclear power capacity by the year 2050. However, the Indicative Generation Expansion Plan (IGCEP) 2021-30 prepared by NTDC models only C-5 as a candidate project. The sponsors may explain whether Power Division and NTDC have been taken on board during preparation of this power expansion plan and why the entire 8800 MW are not included in IGCEP?