Islamabad:
The National Electricity Regulatory Authority (Nepra) has raised serious questions over an investment plan submitted by the National Transmission and Dispatch Corporation (NTDC) as it appears “unrealistic” to address system constraints that have led to power outages in several times across the country.
The power sector regulator pointed out that the blackout problem was mainly experienced in the southern parts of the country involving transmission lines, so investments should be planned and carried out in areas where there were restrictions on the system. However, the plan lacked investment proposals for the south.
In a public hearing on Wednesday, the regulator noted that provincial governments had approached it to address the restrictions, so they should be consulted on the investment plan.
In documents submitted to Nepra, NTDC announced a major revision of the Transmission Investment Plan for the financial years 2023 to 2025.
Under the plan, NTDC will execute 46 projects costing Rs 178 billion in Punjab, which accounts for 35% of the total. In Sindh, it will undertake 15 projects at a cost of Rs 43 billion, constituting 9%, in Khyber-Pakhtunkhwa it will implement 18 projects at a cost of Rs 224 billion (44%) and in Balochistan it will develop eight projects at a cost of Rs 12 billion. 2% stake.
The regulator raised concerns over the low investment of 2% in Balochistan where “darkness prevails due to less electricity supply”. He also noted that the people of Balochistan will pay the cost of the projects in electricity tariffs along with consumers in other provinces.
Reading: NEPRA faces scrutiny on electricity cost and capacity
Nepra also took up earlier schemes designed to address system constraints. NTDC officials informed during the hearing that projects to lift the restrictions had already been identified but they could not be implemented so far.
Regarding the demand forecast, they said that representatives of the provinces had given their estimates of the demand for the finalization of the investment plan.
design: mohsin alam
However, the regulator claimed that Balochistan faced problems with grid voltage and installation, which had not been resolved. He stressed that the investment plan should be finalized keeping in mind the integrity, reliability and sustainability of the system to ensure uninterrupted power supply to consumers. During a presentation, he was informed that a critical element of NTDC’s strategy was the Right of Way bill. This draft law, prepared by the Legal Directorate of NTDC, aims to address various issues including railway crossings, national highways and highways.
The bill, which is currently pending legislation, has been forwarded to the Department of Energy for presentation to the legislature.
Read more : NTDC and AFD sign €180m deal
It was pointed out that the Transmission Investment Plan was closely aligned with the Transmission System Expansion Plan, where each project was technically justified.
This plan takes into account each distribution company’s demand forecast and coordinates with them on project proposals. The design process complies with the provisions of the Internet Code 2023.
The investment plan includes several critical transmission projects, including power evacuation plans for upcoming generation projects, system enhancements and stability improvements.
However, the NTDC faces challenges in the Right of Way, facing resistance from project-affected people, the historical lack of compensation policies and inadequate legal frameworks. These issues led to project completion delays, penalties, loan problems with lenders, and increased project costs.
NTDC’s investment plan includes schemes to eliminate vital bottlenecks such as Gatti, Muzaffargarh, Multan, 220kV Sarfaraz Nagar and addressing issues of underutilization of high voltage, direct current (HVDC) lines and power stations in the south.
However, the economic impact of system limitations cannot be precisely determined due to operational dependencies such as fuel cost fluctuations and actual electricity distribution.
Cost overrun detector
NTDC is facing cost overrun of Rs 180.382 billion in 42 projects. However, it maintained that the actual cost overrun came to Rs 27.6 billion after accounting for the indexation of the foreign exchange component and PC-I revisions. Reasons for these overruns include the significant escalation of the dollar and projected future spending on projects that have not yet begun.
An important factor affecting the cost of the project is the devaluation of the currency with a noticeable foreign exchange component.
The USD-PKR trend has led to significant increases in project costs at various intervals, highlighting the challenges faced by NTDC in managing its extensive infrastructure development plans in a volatile economic environment.
Published in The Express Tribune, November 23rd2023.
Like Businesses on Facebook, follow @TribuneBiz on Twitter to stay updated and join the conversation.
a href=”https://tribune.com.pk/story/2447654/ntdc-investment-plan-termed-unrealistic”>Source link
