PESHAWAR: The Khyber Pakhtunkhwa government will have to

face Rs 48.5 billion annual loss under the hydel power head due
to the handing over of hydropower projects to the private sector
and its flawed energy policy.
The province was to get Rs 51.19 billion income through 14 hydropower
projects of 1461MW, but these projects are being given to the private
sector. The private sector will give only Rs 2.69 billion annually to the
province as water use charges. This will deprive the province of Rs 48.5
billion hydel profit. The private sector will need two years to complete the
Lease of Support and other legal matters that will further delay the
projects.
Rejecting the allegations, the KP government says it has no resources to
complete hydel power projects. So the private sector is making
investment and the province will get only water use charges.
The government, due to its limited resources, is working on eight projects
of 270MW costing Rs 90 billion. The private sector will be bound to
complete legal requirements and provide funds within the prescribed time
like the government sector so that the projects could be completed on
time. Establishing micro hydroelectric stations is the preference of the
government and it will benefit the PTI in the general elections.
However, experts term the micro hydroelectric projects non-maintainable
because flash floods often sweep away such installations. According to
details, the KP government has devised an energy policy under which 14
projects of 1461MW will be completed with the cooperation of the private
sector. The government will get Rs 2.69 billion annually as water use
charges at the rate of Rs 0.42 per unit. On the other hand, the
government can earn Rs 51.19 billion annually by establishing 1461MW
projects through its own resources and selling electricity to the Wapda at
the rate of Rs 8 per unit.
The PTI government policy of handing over these projects to the private
sector has caused doubts. Critics, in this context, refer to the 81MW
Malakand Three Project completed by the previous government. This
project cost Rs 6 billion and 37 crore. The government provided Rs 2
billion and 55 crore from the Hydel Fund, whereas the remaining Rs 3
billion and 82 crore were loaned by the Bank of Khyber and other banks.
The loan was taken from the banks for five years and returned in three
and a half years. Interestingly, the Shydo completed the project at the
cost of Rs 5 billion and 34 crore, saving Rs 1 billion and 3 crore. The
Malakand Hydropower Project is producing 81MW, giving the province a
profit of Rs 2.5 billion annually.

In 2010, the ANP government devised a 10-year Energy Action Plan under
which 24 hydropower projects were to be completed. As much as
2,100MW electricity was estimated to be produced from these projects
and Rs 350 billion were required for these projects. The ANP government
put the 24 projects under the ADP. Work was started on 11 projects,
whereas it was decided to prepare feasibility of 13 projects. The feasibility
of the 13 projects was completed during the ANP government. The ANP
government decided to complete all energy projects on its own, whereas
the PTI government decided to complete these projects through the
private sector. It published seven advertisements in this regard. As much
as 1,461MW electricity was to be produced through 14 projects.
The ANP government made a 10-year Energy Action Plan 2010-21. It
planned to complete three short-term 56MW projects in three years till
2015 and eight 625MW mid-term projects in five years. It had to complete
13 long-term 1,322MW projects in 10 years. The ANP government started
work on the 17MW Ranolia Hydropower Project in 2011, costing Rs 5
billion and 24 crore. It got a loan of Rs 3 billion and 50 crore from the
Asian Development Bank, whereas Rs 1 billion and 74 crore were allocated
from the Annual Development Fund. This project was completed in 2015.
Likewise, the 26MW Machai Hydropower Project cost Rs 1. 5 billion. For
this project, Rs 87 crore and 90 lakh were taken from the Asian
Development Bank and the remaining Rs 61 crore were got from the
Annual Development Fund. This project was completed in June 2015. The
36MW Dral Khosar Project completed last year had also been started by
the ANP government. This project cost Rs 8 billion and 45 crore and Rs 6
billion and 98 crore were taken from the Hydel Development Fund and Rs
1 billion and 42 crore from the Annual Development Fund. The remaining
Rs 4 crore and 83 lakh were taken from the Asian Development Bank. All
the three projects were started by the ANP government and completed in
the PTI government.
Medium-term energy projects

Under the medium-term energy action plan, eight projects with the
capacity of producing 627-megawatt electricity were also proposed during
the ANP rule. Approval for construction was also given for two projects
84-MW Matiltan hydropower project and 69-MW Lawi hydropower project,
but the Energy Action Plan could not be implemented during the Pakistan
Tehreek-e-Insaf government. Tenders were invited for various times, but
cancelled after objections from different parties.

During the ANP government, the cost of Lawi project was estimated at
Rs21.58 billion. It was planned to provide Rs19.42 billion from hydel fund
and Rs2.15 billion from annual development fund.
For Matiltan project, estimated cost was Rs22 billion, and Rs19.81 were to
be allocated from hydel development fund and Rs2.20 billion were to be
provided from provincial government fund. However, unfortunately both
projects were put on the back burner.
In district Dir Upper, a 150-MW Sharmai hydropower project was to be
completed in 2017, but work could not be initiated on it. Now
advertisements are being published in newspapers for completing these
projects in private sector.
Another 144-MW hydropower project Shogosin in Chitral was to be
completed in 2017, but its completion is still pending.
Also, 144-MW Shushai-Zhendoli project was set to complete in 2017, but
no construction work was launched on it. The provincial government is
contemplating their completion through private sector currently, and the
main reason for it is non-provision of funds by them.
Long-term energy projects