PAKISTAN: CEPA awards $1,000 million power contract

13 June 1997

Hong Kong-based Consolidated Electric Power Asia (CEPA) has awarded a $1,000 million engineering, procurement and construction contract to Japan's Mitsubishi Heavy Industries and Black & Veatch International of the US for the first phase of its planned power station at Keti Bandar. However, progress on the project is dependent on the government issuing tenders for the transmission network, linking Keti Bandar to Jamshoro, sources at CEPA say.

Under a memorandum of understanding signed by CEPA and the government in 1994, the state-owned Water & Power Development Authority (WAPDA) was to issue tender documents for building, operating and maintaining a 185-kilometre transmission line that would serve the power station at Keti Bandar. The new government has failed to call potential bidders to a pre-bid meeting, project sources say. As the private power policy of the former government of Benazir Bhutto comes under increasing criticism, the local press has speculated that the new government is seeking to withdraw its support for the project. CEPA says it has offered to assist WAPDA in implementing the transmission project or to take responsibility for the project itself. The transmission line would require investment of $200 million- 250 million.

The coal-fired power station will have a total capacity of 1,320 MW. It will use coal imported from Australia. A second phase, using indigenous coal, is also planned, which will extend capacity to 5,280 MW. The government is currently evaluating offers to undertake a feasibility study on the development of coal resources in the Thar desert, for this purpose. CEPA has provided $5 million to fund the study. The project will also include the development of a port and industrial zone.

CEPA says it is actively working on the financing of the power plant. Debt finance is expected to include export credits from the US' Export- Import Bank and Japan's Export-Import Bank.

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