Tuesday, March 24, 2009

China Signs Power Plant Deals With Pakistan


China has agreed to build several power plants in Pakistan to help the South Asian nation deal with its worsening electricity crisis. When completed over the next several years, these plants, including Nandipur (425 MW, Thermal), Guddu(800 MW, Thermal) and Neelam-Jhelum(1000 MW, Hydro), Chashma (1200 MW, Nuclear) will add more than 3000 MW of power generating capacity for the energy-hungry country. Pakistan is currently facing a deficit of 4,000 to 5,000 megawatts, resulting in extensive load-shedding (rolling blackouts) of several hours a day.

China has already installed a 325-megawatt nuclear power plant (C1) at Chashma and is currently working on another (C2) of the same capacity that is expected to be online by 2010. The agreements for C3 and C4 have also been signed. The United States has objected to China supplying C3 and C4 on the grounds that any Pak-China nuclear cooperation would require consensus approval by the NSG, of which China is now a member, for any exception to the guidelines. The US is applying double standards since it supported and got approval for such an exception from NSG for its own nuclear deal with India.

Under another agreement, China has agreed to invest about $600 million for setting up an integrated coal mining-cum-power project in Sindh. The project will produce 180 million tons of coal per year, which is sufficient to fuel the proposed 405 MW power plant. Pakistan is currently world's seventh largest coal-producing country, with coal reserves of more than 185 billion tons (second in the world after U.S.A.'s 247 billion tons). Almost all (99 percent) of Pakistan's coal reserves are found in the province of Sindh. Pakistan's largest coal field is Thar coal field which is spread over an area of 9100 square kilometers, and contains 175 billion tons of coal. So far this coal field has not been developed but efforts are underway.

The Export-Import Bank of China will lead the multi-national bank financing and China Export and Credit Insurance Corporation (Sinosure) will provide political risk and credit default insurance for the first 425 MW project at Nanipur, Gujranwala estimated to cost $329m, according to Associated Press of Pakistan. Other participating banks include BNP-Paribas, HSBC Bank plc, and CIC France. The lead contractor is China's Dongfang Electric Corporation Limited, with G.E. France as a sub-contractor.



Political risk has been rising in many developing nations, including the South Asian nations of Bangladesh, India, Pakistan and Sri Lanka (see 2008 political risk map). The cost of insurance against political and economic risk has also been going up, as the global economic crisis unfolds. Hong Kong-based Political & Economic Risk Consultancy Ltd. has recently rated India as the riskiest of 14 Asian countries, not including Pakistan and Afghanistan, it analyzed for 2009.

With their national coffers bulging and their exports driven economy slowing, the Chinese see opportunity in the developing world where others see political and economic risks. It is an opportunity for China to assure the continuing availability of raw materials and oil for its growing industries and to diversify its export markets. In addition to helping bail out the ailing US economy, China is using some of its vast cash reserves of $2 trillion to offer supplier financing as well as insurance for the non-Chinese partners to cover political and credit risk in the emerging markets. With bilateral trade volume of about $7 billion, Pakistan is only one example of Chinese interest. Others include politically-risky Afghanistan, and many nations of Sub-Saharan Africa where the Chinese are financing and building major infrastructure projects. In Afghanistan, China has committed nearly $2.9 billion to develop the Aynak copper field, including the infrastructure that must be built with it such as a power station to run the operation and a railroad to haul the tons of copper it hopes to extract. The Aynak project is the biggest foreign investment in Afghanistan to date, according to Reuters. The trade between Africa and China has grown an average of 30% in the past decade, topping $106 billion last year.

Looking at how the Chinese are working with many developing nations in Asia and Africa, it appears to be an unwritten Chinese policy to offer trade and investment in projects rather than direct cash aid. Given the rampant government corruption in many developing nations, including Pakistan, the Chinese policy is a sound one. It attempts to benefit the people and the nation more than the corrupt politicians and government officials who they must deal with.

In terms of Chinese dominance in power infrastructure development, one only needs to look at the heavy Chinese presence in the Indian power sector development. According to the Wall Street Journal, Chinese companies are now supplying equipment for about 25% of the new power capacity India is adding to its grid, up from almost nothing a few years ago. They have sent thousands of skilled workers to Indian plant sites, some of which boast Chinese chefs, Chinese television and ping pong.

Clearly, the Chinese objectives are not entirely altruistic. Their strategy is driven by enlightened self-interest in the developing world, which they see as source of commodities that their industries need as well as growing export market for their products and services. But the Chinese want to do good and do well at the same time by helping to lift people out of poverty in the developing world. By doing so, they want to be seen as friends and partners by the people in Asia, Africa and Latin America. The strategy enhances China's status as the new superpower that takes its global leadership role seriously.

Related Links:

Chinese Do Good and Do well in Developing World

World's Largest Solar Deals

Pakistan Inks Neelum-Jhelum Deal

Political Risk Insurance

Political and Economic Risk Consultancy

Pakistan's Electricity Crisis

Forget Chinindia! It's Chimerica to the Rescue!

31 comments:

Vikram said...

Well, thats good news. Definitely when it comes to building infrastructure, India and Pakistan could learn a thing or two, perhaps more from the Chinese.

On the note of risk, I am not sure. I can totally see why many would consider India dangerous. Certainly our society has gone through intense polarization in the last 2 decades. But I think of democracy and elections as ways to defuse tensions (esp. in the long run) rather than create some.

Also I think the payoff of the government getting feedback from the masses is worth the political uncertainty. One example is the investments India made in the rural areas (through the NREGA) after the 2004 elections. They seem to be paying off now,


http://www.livemint.com/2009/03/22232920/Why-rural-India-isn8217t-sl.html
http://www.washingtonpost.com/wp-dyn/content/article/2009/03/19/AR2009031903621.html
http://timesofindia.indiatimes.com/Opinion/Columnists/SA-Aiyar/Swaminomics/India-slumps-Bharat-rises-Congress-smiles/rssarticleshow/4240103.cms

I dont think this would have happened if the NDA government had not kicked out following its 'India Shining' campaign.

Riaz Haq said...

Vikram,

The Washington Post report about rural India is very encouraging. Thanks for sharing it.
Looks like Congress stands a good chance of winning the upcoming elections.

Riaz Haq said...

Here's an excerpt from International Herald Tribune about China "driving harder bargains" in Africa:

Just a year ago China appeared to be upending the decades-old order in Africa, stepping into the void left by large Western companies too timid to invest in the continent's resource-rich but fragile states as the market for copper, tin, oil and timber soared to new heights. In the new scramble for Africa's riches, China sought a hefty share.

With a no-strings-attached approach and a strong appetite for risk, China seemed to offer Africa a complete economic and political alternative to the heavily conditioned aid and economic restructuring that Western countries and international aid agencies pressed on Africa for years, often with uninspiring consequences. Rising China, seeking friends and resources, seemed to be issuing blank checks.

Today, China's quest for commodities has not stalled. State-owned companies are bargain-hunting for copper and iron ore in more stable places like Zambia and Liberia. But Chinese companies are now driving harder bargains and avoiding some of the most chaotic corners of the continent. African governments facing falling revenues are realizing that they may still need the West's help after all.

Riaz Haq said...

There have been widespread complaints in Islamabad, including by Finance Minister Shaukat Tarin, that the government had solutions to improve the power output but was refusing to implement them in order to benefit a handful of power plant operators, such as those supplying rental power at exorbitant rates, while the IPPs are not being paid for supplying power from currently underutilized installed capacity. Requests for information by Transparency International Pakistan regarding rental power contracts have been ignored by the Ministry of Water and Power. There are widespread corruption allegations against Mr. Zardari personally who has influenced the award of the 783 MW rental power contracts to a former governor of Oklahoma and his Pakistani partner.

Riaz Haq said...

Here is an excerpt from a recent report from Pakistan Economist about rental power in Pakistan:

Pakistan People's Party led coalition government has opted the option of using Rental Power Plants (RPPs) to overcome persistent electricity crisis that is not only causing great amount of hardships for the fellow citizens but also hitting hard to country's economy. There is much hue and cry from political and other circles over alleged kickbacks in deals of RPPs. Pakistan Muslim League-Nawaz has already announced to issue a White Paper on RPPs while another opposition party-Pakistan Muslim League (Q)- is also at the forefront in highlighting alleged wrongdoings in the execution of RPPs. Sources in PEPCO told PAGE that RPPs would provide electricity at a quick speed compared to IPPs which will reduce power deficit on an emergency basis. These rental projects are for five years and its costing responsibility rests with private sector investors.

The contract life of these projects is between 3-5 years, after which the government has no obligation to purchase power from these units. According to them, it is incorrect to suggest that rental power costs are substantially higher than that of IPPs. Due to different tariff of rental plants, even after taking into account the high fuel costs, the cost difference is almost equal or marginally higher in case of RPPs. Compared with IPPs, RPPs power generation cost ranges between 12-13 cents per KWh, and IPPs' power generation costs approximately 12 cent per KWh. Government circles are of the view that mere blame game is going on just for the sake of leg pulling. There is nothing wrong in RPPs and the only viable option to get rid of load shedding is rental power plants, they believe. They said rental tariffs for the projects depended on number of factors including location of the plants, system maintenance, and consumption of fuels. Others factors are variation in project cost due to difference in technology, age of machinery, and variations in financing. As many as, 14 approved RPPs with total generation capacity of 2250MW will start functioning by December, which would expectedly end the energy crisis.

However, critics of RPPs are of the sanguine view that highly controversial RPPs are proving last resort to overcome the power crisis, which has hit hard the economic growth of the country besides adding salt to public miseries at large. The political government has surrendered to public pressures on construction of Kalabagh Dam, the only way to survive ahead and instead preferred to go after a stopgap arrangement at a higher cost. The independent experts are of the view that RPPs would not only fail to meet rising electricity demand but also burden the national exchequer in general and power consumers in particular. The public is justifiable in questioning that if RPPs are the option, why it is adopted too late. According to Pakistan Electric Power Company (Pepco) Managing Director Tahir Basharat Cheema, an investment of around US $2 billion is expected in power sector through RPPs. Apart from investment in power sector, additional electricity of 1675 MW will be added in the system by December 2009 when nine rental power projects will start generation.

However, overall 2250 MW electricity will be generated through RPPs in current fiscal year (2009-10). Two rental power projects that have already started generation include Atlas Power (213 MW) and Attock Generation (156 MW) while remaining seven will start functioning by December 2009. These RPPs include Nishat (196 MW), Engro (203 MW), Saif Power (213 MW), Fauji Foundation (176 MW), Sapphire Electric Company (213 MW), and Orient Power Company (213 MW). He said all proposals of RPPs were accepted only with bid bonds and performance guarantee by sponsors.

Riaz Haq said...

Here's a blog post about "Power Politics" on "Teeth Maestro". It was produced by Center for Research and Security Studies:

Two questions: why have some private power producers completely shut down? Why are private power producers operating way below their full generating potential? Two answers: political score-settling plus the circular debt.

We at the Centre for Research and Security Studies (CRSS) have been trying for months to ascertain the crux of our power politics. Almost all roads lead back to the government. The federal government is the largest power defaulter, then come the four provincial governments, FATA, the KESC and the KW&SB. This is how the circular debt explodes into even bigger circles: the federal government does not pay its electricity bills to Water and Power Development Authority (WAPDA).

WAPDA is then unable to pay for electricity it buys from IPPs. IPPs are then unable to pay for their oil supplies. Refineries, short on cash, are unable to pay their foreign suppliers. Grow, grow, grow and we have a Rs200 billion time bomb.

Welcome to the rental power bonanza; the government’s ingenious – canny, crafty and cunning – all-in-one solution for the crux of our power politics. What we need to do is to re-start the power producers that are shut down. That’s 800 MW at US 11 cents per MW. What we need to do is to resolve our circular debt puzzle. What we need to do is to get our sugar mills connected to the national grid which could generate an additional 2,200 MW at less than US 11 cents per MW.

Riaz Haq said...

Here' Reuter's analysis of rental power in Pakistan:

Aides of Finance Minister Shaukat Tarin said he almost resigned after failing to persuade the cabinet against renting, an option he considered expensive and inefficient.

Here are some questions and answers about the plight of the power sector in Pakistan and leasing plants.

WHAT IS THE PROBLEM?

Pakistan has about 20,000 MW of installed power production capacity, but that falls short of demand by roughly 4,000 MW. Lengthy power cuts, dubbed load shedding, have become commonplace.

Past governments failed to anticipate the growth in demand and delayed clearing power project proposals and big dam projects that would have boosted hydro power.

Lack of investment in existing plant, outdated grids and rampant electricity theft mean that some grid companies experience line losses of up to 30-40 percent, analysts say.

Many independent power producers (IPPs) operate well below capacity because they cannot pay their fuel bills regularly as grid companies owe them money.

The crisis has crippled industry, notably textiles, the main export sector and largest employer in the manufacturing sector.

There have also been violent protests that some analysts see as a bad omen both for the government and democracy in a country struggling to contain the growth of Islamist militancy.

WHAT IS BEING DONE TO BOOST SUPPLIES?

The 18-month-old civilian government has vowed to increase supplies but needs huge finances.

It recently reached an agreement with the World Bank and Asian Development Bank to phase in power tariff increases.

The government is working on a multi-pronged strategy to address the problem through building new dams and setting up new permanent power plants. It sees Rental Power Plants (RPPs) as the "only solution", while completing medium and long-term projects.

WHAT IS RENTAL POWER PLANT?

Countries can hire power units from overseas manufacturers that can be shipped in kit form and installed.

It takes four to six months to set up a rental unit, while two to five years may be needed for an Independent Power Producer to build a plant.

Surging emerging economies like China and Turkey have gone the short-term rental route to bridge power supply gaps. And Pakistan, according to official documents, had two rental units commence operation in 2007.

Under the new plan, additional RPPs would be set up to generate 2,250 MW by the end of the year.

HOW WILL RENTAL POWER PLANTS IMPACT FUEL DEMAND?

The rental power plants would increase the Pakistani power sector's furnace oil needs by 29 percent, driving up its import bill and adding to pressure on the rupee and currency reserves.

Pakistan requires 35,000 tonnes a day to feed its thermal power plants and the installation of the RPPs will increase demand to 45,000 tonnes, officials say.

The country imports about 80 percent of its oil. It spent $9.5 billion on the import of 10.6 million tonnes of petroleum products and 7.8 million tonnes of crude oil in the 2008/09 (July-June) financial year.

WHAT ARE THE PROS AND CONS?

Rental plants can provide breathing space for Pakistan to focus on medium- and long-term projects.

Advocates say rental plants are efficient, will help quickly meet growing needs, and end-consumers will pay the same or a bit less for their electricity.

Opponents say the mostly second-hand equipment will be less efficient and that the tariff will rise. They argue that the government would be better off spending money on upgrading and using idle existing capacity.

Some opponents also say the option is being supported by corrupt politicians hoping for kickbacks.

Riaz Haq said...

Here is an explanation offered by the News for gas and CNG shortage in Pakistan:

ISLAMABAD: The multi-million dollar mystery shrouding the serious shortage of gas in the country, which has already led to twice a week closure of CNG stations, seems to have finally been resolved, as millions of cubic feet of gas per day is now being supplied to powerful owners of the controversial rental power plants in the country as the Economic Coordination Committee of the Cabinet meeting on Tuesday (tomorrow) has been asked to approve additional supplied for these plants.

The official sources said these expensive rental power plants, which were being installed with tall claims to address the energy crises in the country, were said to have now become one of the major reasons behind a new sorts of energy crises in Pakistan, as their gas requirements are bound to hit other sectors of economy running on gas supplies. The cement sector has already been hit as its gas supply is now being diverted to one such power plant at Naudero.

Under the agreed deal which was subjected to criticism both within and outside the Parliament, these rental power plants will continue to get gas supplies for five years till the completion of their agreements with the Ministry of Water and Power.

The formal approval of this gas supply is being given in the Economic Committee of the Cabinet (ECC) meeting tomorrow (Tuesday). Finance Minister Shaukat Tarin will preside over the meeting as Petroleum Minister Naveed Qamar is out to get the approval for these plants as proposed in the official summary of his ministry.

The sources said the supply of gas would become a huge issue in the coming days for even the domestic consumers after the government would divert more gas to these rental power plants after diverting it from the sectors which were now regularly getting the supplies. Now ECC was asked to give supply of gas only for one plant. Sources said, more demands from other power plants will soon follow and then the country would really experience the burden of these power plants, which were ironically being installed to address the very energy crises of the country.

The official papers to be laid in the ECC meeting revealed that the gas meant for the cement sector in particular was being drastically reduced and diverted to the rental power plants in the country. One source said, certain other sectors which are already getting the gas in the country soon may also face similar kind of cuts in their approved supply to accommodate the privileged and powerful owners of the plants having direct links at the top levels.

The huge gas supply is being supplied as a part of deal struck with these rental power plants by the Ministry of Water and Power in controversial circumstances.

According to the official papers to be tabled in the ECC meeting, the Ministry of Petroleum was now seeking the approval of diversion of gas from cement to power plants and initially a power plant of 51 MW was being provided with 30MMCFD. The papers said earlier the ECC has decided on October 2 to place 12 MMCFD gas from SSGC system at the disposal of PPIB/Ministry of Water and Power for five years for power generation in accordance with the natural gas allocation and management policy of 2005. The official summary said the Ministry of Water and Power have now informed that 12 MMFCD gas been allocated to the power plants project.

The summary said, based on SSGCL commitment, it is proposed that 15 MMCFD additional gas from SSGCL system which includes diversion of 14MMCFD gas being supplied to cement sector may be placed at the disposal of PPPB/ Ministry of Water and Power on the “ as and when available basis for five years” for power generation subject to following conditions.

Riaz Haq said...

Here's a Wall Street Journal report about India trying to reduce dependence on China in power sector:

MUNDRA, India—India is trying to rein in its heavy reliance on Chinese equipment and know-how for the ambitious expansion of its power sector. The shift casts a shadow over what has been a healthy partnership in an often tense relationship between the giant neighbors.

India wants to boost electricity output by 60% in the five-year span ending March 2012 to alleviate severe shortages and help fuel a rapidly growing economy. But it doesn't have enough of its own equipment and engineers to meet that goal, so power companies have looked overseas for help. U.S. and European suppliers are too expensive, but low-cost Chinese contractors are a good fit.

Chinese companies are now supplying equipment for about 25% of the new power capacity India is adding to its grid, up from almost nothing a few years ago. They have sent thousands of skilled workers to Indian plant sites, some of which boast Chinese chefs, Chinese television and ping pong.

But now India is reining in cooperation with China as it seeks to build up its own manufacturing base to service power plants. The Central Electricity Authority, India's top planning body for power projects, recently asked government-controlled power companies to use Indian equipment on all upcoming big projects.

The Indian government is also considering a plan to tax Chinese power imports. And Prime Minister Manmohan Singh's aides have told power regulators to make sure India has enough spare parts on hand to fix Chinese equipment when it needs repairs, according to a person familiar with the discussions.

"It's better that we depend on our own capabilities rather than depend on those from the outside," Rakesh Nath, chairman of the Central Electricity Authority, said in an interview.

Riaz Haq said...

Chinese have become master manufacturers-builders and their equipment and contractors are so affordable that even India is using them for a large number of power projects.

Here is an excerpt from a recent Wall Street Journal report on it:

"India wants to boost electricity output by 60% in the five-year span ending March 2012 to alleviate severe shortages and help fuel a rapidly growing economy. But it doesn't have enough of its own equipment and engineers to meet that goal, so power companies have looked overseas for help. U.S. and European suppliers are too expensive, but low-cost Chinese contractors are a good fit.

Chinese companies are now supplying equipment for about 25% of the new power capacity India is adding to its grid, up from almost nothing a few years ago. They have sent thousands of skilled workers to Indian plant sites, some of which boast Chinese chefs, Chinese television and ping pong."

Riaz Haq said...

Here are excerpts from a Washington Post report about China-Pakistan nuclear deal:

"President Obama has strongly advocated for restrictions on the spread of nuclear technology. But his administration has said little publicly about the China-Pakistan deal. Meanwhile, the administration announced Tuesday that China, despite its misgivings, had signed on to a draft U.N. Security Council resolution sanctioning Iran."

"A senior administration official, speaking on the condition of anonymity to talk more freely, said the United States is waiting for China to detail how it plans to proceed with this transaction. "We don't have much clarity, and so the issue has not ripened in the government," he said. He said any claim that the reactors are grandfathered "would be a hard case to make," but China could seek a formal exemption from the guidelines -- which are voluntary in any case.

Indeed, complicating matters is that the United States, after hard lobbying, in 2008 won a specific exemption at the NSG for trade with India, Pakistan's nuclear-armed rival. Pakistan has long wanted its own exemption -- and the United States has refused -- but the administration may not want to roil relations with Islamabad at a time when their partnership on counterterrorism is seen as crucial."

"Daryl G. Kimball, executive director of the Arms Control Association, said the China-Pakistan deal "is some of the fallout of the India-U.S. civil nuclear agreement" -- which included the special exemption for nuclear trade. The deal was a Bush administration initiative -- but was avidly supported by then-Sens. Barack Obama, Joseph R. Biden Jr. and Hillary Rodham Clinton."

Riaz Haq said...

The Transparency International Pakistan (TIP) has claimed that it has identified corruption cases worth Rs 300 billion in different federal government departments during the last one year.

Expressing his disappointment, Chairman TIP Syed Adil Gillani said that there was no effective accountability process in Pakistan due to which corruption was on the rise. He said that the TIP referred a number of corruption cases to the National Accountability Bureau (NAB), one of Pakistan's controversial departments, but it did not initiated so far a single case against the perpetrators.

"Only the Supreme Court of Pakistan, the Public Accounts Committee of the National Assembly and the Public Procurement Regulatory Authority (PPRA) took notice of some of these corruption cases," he said.

The report released by TIP on Tuesday indicates that Pakistan is all set to hit further lows amongst the world's most corrupt nations. The 2009 report showed Pakistan climbing five numbers from the previous 47 to become the 42nd most corrupt country in the world.

Amongst the major corruption cases, Gillani said the Rental Power Projects (RPPs) of the government, was on the top. The government awarded 14 contracts in violation of the PPRA rules which caused a loss of over US$ 2 billion. The TIP had also written to the Supreme Court on this case of massive corruption and irregularity.

The sale and procurement policy of the Pakistan steel Mills had caused a reported loss of Rs 22 billion due to corruption. This corruption case had already been taken up by the apex court.

Gilani also informed of about the alleged violation of Pubic Procurement Rules 2004 by Pakistan Railways in the tender for procurement of 150 locomotives, only US made, which might have caused a loss of at least Rs 40 billion to the national exchequer. The project, he said, is presently on hold.

The other departments involved in mega corruption cases, according to Gillani, include Pakistan's Oil and Gas Development Company (OGDCL), National Insurance Corporation Limited (NICL), PRIMACO (Pakistan Real Estate Investment and Management Company Ltd), National Highways Authority (NHA), Trade Development Authority of Pakistan (TDAP), Pakistan Electric Power Company (PEPCO), Employees Old-age Benefit Institution (EOBI). Pakistan's Oil and Gas Development Company Limited made headlines in the recent past when Prime Minister Gillani appointed his jail mate and a convict who was not even a graduate as its managing director.

Read more: Pakistan world's 34th most corrupt nation - The Times of India http://timesofindia.indiatimes.com/world/pakistan/Pakistan-worlds-34th-most-corrupt-nation/articleshow/6815792.cms#ixzz13Vn9ofdc

Riaz Haq said...

Here is a NY Times report on Wen Jiabao's visit to Pakistan:

ISLAMABAD, Pakistan — Prime Minister Wen Jiabao of China praised Pakistan’s efforts to combat terrorism and promised to further advance the two countries’ strategic partnership and economic cooperation in a speech to the Parliament on Sunday.

Mr. Wen’s remarks came a day after China and Pakistan signed $15 billion worth of trade deals, bringing the total value of the agreements signed during his three-day trip to $30 billion over the next five years.

The Pakistani government said the two countries had agreed to widen the Chinese-built Karakoram Highway to facilitate trade, and China said it would give more support in the energy sector.

In a joint communiqué, the two countries pledged to cooperate further on security and military issues, energy, transportation, space technology, banking, infrastructure development, heavy machinery manufacturing, cultural exchange and finance.

Addressing the Pakistan-China Business Summit in Islamabad on Saturday, Mr. Wen noted that the two countries had trade worth just $1 billion in 2002, but $6.8 billion in 2009. He expressed the desire to expand trade between the two countries, which signed a free-trade agreement in 2006, to $10 billion as soon as possible.

Mr. Wen praised Pakistan’s sacrifices in combating terrorism and extremism, words that were in stark contrast to warnings from Washington that Pakistan needed to act more aggressively against insurgents.

“Pakistan has paid a heavy price in combating terrorism,” Mr. Wen said. “The fight against terrorism should not be linked with any religion or ethnic group, and there should be no double standards,” he said as lawmakers burst into applause.

“The international community should affirm that and give great support, as well as respect the path of development chosen by Pakistan,” he added.

The Chinese prime minister made no mention of India, the estranged neighbor of Pakistan. Pakistan sees China as a counterweight to India in the region, and China’s close ties with Pakistan have become a source of growing discontent in New Delhi.

Mr. Wen said the strategic partnership between China and Pakistan was “in conformity with the national interests of the peoples of the two countries. It would help promote peace, stability and prosperity of the region.”

Riaz Haq said...

China has offered to invest about $15 billion in Pakistan’s energy sector projects, according to Dawn News:

A Chinese delegation led by Cao Guanging, chairman of the state-owned China Three Gorges Project Corporation (CTGPC), discussed the Kohala, Bunji, Bhasha, Dashu and other hydropower projects in the upper and lower Indus valley during a meeting with Finance Minister Dr Abdul Hafeez Shaikh on Wednesday.

Dr Hafeez welcomed the offer and said he would try to develop consensus on issues relating to the projects. He said he would consult with the ministries of water and power and law and justice to sort out legal and other issues.

He informed the delegation about the country’s bidding rules and laws and assured it that the bidding process would be held in a transparent manner.

He said the Chinese offer had been discussed at a recent meeting of the Economic Coordination Committee of the cabinet. He said the projects identified by the CTGPC would be taken up with it but only after the completion of procedural matters.

The Chinese offer to provide financial and technical assistance for hydel and wind power projects, upgrade the transmission system and provide an integrated solution to the problems of power shortage and disruptions was elaborated by the CTGPC delegation at the Aiwan-i-Sadr on Wednesday.

Presidential spokesman Farhatullah Babar said in a statement that President Asif Ali Zardari had advised the government to consider tasking the CTGPC with building a run-of-the-river hydro project at Sukkur Barrage and asked Water and Power Minister Syed Naveed Qamar to discuss the project with the sections concerned and prepare a proposal in two months.

The president said that agreements with China ensured full security of Chinese investments in Pakistan. He said the true potential of business partnership between entrepreneurs of the two countries had yet to be fully realised.

Mr Babar said the CTGPC was already involved in a number power projects in the country and offered to build more to address the problems of power shortage. He said the corporation was currently undertaking Karot, Taunsa, Kohala and Bunji hydro-electric power projects. A letter of intent for the 720MW Karot project has been issued after the approval of its feasibility study. The project is currently at the tariff petition stage.

A memorandum of understanding for the 120MW Taunsa hydro-eclectic project has been signed and a development agreement will be signed this month. Mr Babar said the 1,100MW Kohala project was ready for tariff negotiations. A letter of intent for the project has already been issued after the approval of its updated feasibility study.

The 7,100MW Bunji project is ready for site survey. The MoU for the project was signed in August 2009.

Mr Babar said that wind power projects, including Sindh’s first and second wind farms and Punjab’s wind and solar projects, were also in an advanced stage.

Riaz Haq said...

China builds San Francisco Bay bridge, reports NY Times:

At a sprawling manufacturing complex here, hundreds of Chinese laborers are now completing work on the San Francisco-Oakland Bay Bridge.

Next month, the last four of more than two dozen giant steel modules — each with a roadbed segment about half the size of a football field — will be loaded onto a huge ship and transported 6,500 miles to Oakland. There, they will be assembled to fit into the eastern span of the new Bay Bridge.

The project is part of China’s continual move up the global economic value chain — from cheap toys to Apple iPads to commercial jetliners — as it aims to become the world’s civil engineer.

The assembly work in California, and the pouring of the concrete road surface, will be done by Americans. But construction of the bridge decks and the materials that went into them are a Made in China affair. California officials say the state saved hundreds of millions of dollars by turning to China.

“They’ve produced a pretty impressive bridge for us,” Tony Anziano, a program manager at the California Department of Transportation, said a few weeks ago. He was touring the 1.2-square-mile manufacturing site that the Chinese company created to do the bridge work. “Four years ago, there were just steel plates here and lots of orange groves.”

On the reputation of showcase projects like Beijing’s Olympic-size airport terminal and the mammoth hydroelectric Three Gorges Dam, Chinese companies have been hired to build copper mines in the Congo, high-speed rail lines in Brazil and huge apartment complexes in Saudi Arabia.

In New York City alone, Chinese companies have won contracts to help renovate the subway system, refurbish the Alexander Hamilton Bridge over the Harlem River and build a new Metro-North train platform near Yankee Stadium. As with the Bay Bridge, American union labor would carry out most of the work done on United States soil.

American steelworker unions have disparaged the Bay Bridge contract by accusing the state of California of sending good jobs overseas and settling for what they deride as poor-quality Chinese steel. Industry groups in the United States and other countries have raised questions about the safety and quality of Chinese workmanship on such projects. Indeed, China has had quality control problems ranging from tainted milk to poorly built schools.

But executives and officials who have awarded the various Chinese contracts say their audits have convinced them of the projects’ engineering integrity. And they note that with the full financial force of the Chinese government behind its infrastructure companies, the monumental scale of the work, and the prices bid, are hard for private industry elsewhere to beat.

The new Bay Bridge, expected to open to traffic in 2013, will replace a structure that has never been quite the same since the 1989 Bay Area earthquake. At $7.2 billion, it will be one of the most expensive structures ever built. But California officials estimate that they will save at least $400 million by having so much of the work done in China. (California issued bonds to finance the project, and will look to recoup the cost through tolls.)

California authorities say they had little choice but to rebuild major sections of the bridge, despite repairs made after the earthquake caused a section of the eastern span to collapse onto the lower deck. Seismic safety testing persuaded the state that much of the bridge needed to be overhauled and made more quake-resistant.

Riaz Haq said...

Here are excerpts of a Nation Op Ed on Seoul Nuclear Security Summit:

Experts are of the opinion that modest progress had been made in Seoul and many of the tough issues to fully solve the problem were addressed because the participants were unwilling to make binding and transparent agreements. “The current nuclear material security regime is a patchwork of unaccountable voluntary arrangements that are inconsistent across borders…….Consistent standards, transparency to promote international confidence, and national accountability are additions to the regime that are urgently needed,” said Luongo.

The communiqué also omitted a reference to the need for “concrete steps” towards a world without nuclear weapons, a phrase which had been included in an earlier draft statement. A Seoul government official told the media (on condition of anonymity) that some nations had been uncomfortable about expanding the scope of the summit into nuclear weapons reduction and disarmament, and the call for concrete steps.

The Republic of Korea has done a commendable job in steering the conference in a prudent way. One of its striking features is that the conference agenda was kept away from multilateral politics and a consensual approach was adopted. The summit succeeded in creating a shared space for discussion and coordination.

Pakistan has keenly participated in the nuclear security summits. This indicates its continuity of resolve and abiding commitment to the cause. Since the Washington Summit, Pakistan has set up centres of excellence for training and emergency response mechanisms; upgraded physical protection arrangements; and revised export control lists. Following the Fukushima accident, it has conducted thorough stress tests of its nuclear power plants and is in the process of deploying Special Nuclear Materials (SNM) portals on key entry and exit points to prevent illicit trafficking of radioactive materials.

Pakistan is fully committed to continue working at the national level to maintain the highest standards of nuclear security and cooperate with the international community for achieving a secure and peaceful world.


http://www.nation.com.pk/pakistan-news-newspaper-daily-english-online/columns/02-Apr-2012/seoul-summit-2012

Riaz Haq said...

Here's a Nation story on China approving $450 billion loan for Neelum-Jhelum dam project:

Chinese EXIM Bank, after a long delay, has now approved $450 million loan to finance 969MW Neelum Jhelum hydropower project, which would add about 5.15 billion units of cheap electricity to the national grid every year by 2016.Well-placed official sources informed TheNation that Chinese EXIM Bank after a long delay has now approved $450 million loan to finance the Neelum Jhelum hydropower project located near Muzaffarabad adding that the Economic Affair Division (EAD) has also gotten an approval from the Chinese bank in this regard. They told that the Neelum-Jhelum hydropower project needed $700 million foreign funding to complete the project by 2016. The major financiers of the project include the Kuwait Fund, the Export Import Bank of China, the government of the UAE and the Saudi Fund for Development. Sources further told that project had originally been budgeted to cost Rs130 billion, but costs had witnessed skyrocketed rise by 154per cent to Rs330 billion. In the revised plan submitted by the water and power ministry, the main reason for the spike in costs was attributed to a change in design, but a detailed examination of the figures has shown that primary cause for the increase was delay in completion. Sources further told that more than 30per cent of the work on the project had been completed. The project would earn about Rs45 billion in revenues annually and would therefore be able to recover its cost of construction within seven years.It is also learnt that as the Chinese EXIM bank found hesitant to release the worthy amount since 2009 resultantly the delay for unknown reasons had caused the cost of the project to rise to Rs330 billion ($3.7 billion). It was also feared that the pace of construction might slowdown providing an edge to India, which had been building Kishanganga project on the same Neelum River on its side of Kashmir because if Pakistan failed to complete its project before India, then it might lose the water rights to the upper riparian country. Further, according to Indus Water Treaty (IWT), the country that first completes its project on Neelum tributary will have the priority rights on the water of Neelum River. Furthermore, the Neelum Jhelum Hydropower Project Company (NJHPC), a wholly owned subsidiary of the Water and Power Development Authority was set up to manage this very project.It is to be noted here that the top man of China had committed this loan during the visit of President Asif Ali Zardari to Beijing in 2009 but the Chinese Exim bank did not entrain Pakistan although three years have elapsed since the commitment of China to Pakistan resultantly the country was in contact with Islamic Development Bank, Saudi Development Bank, Abu Dhabi Fund, Kuwait Fund for the required finding. Even IDB had committed $200 million, Saudi Fund $337 million, Abu Dhabi Fund $100 million and Kuwait Fund $30 million and the government was pursing the said donors to expedite the disbursement of their credit line for the timely completion of the project.Waqar Masood Secretary Economic Affairs Division while confirming the information pertaining the receiving of approval worth of $450 million loan to help finance the 969-megawatt Neelum Jhelum hydropower project. He also informed that documentation process in this regard would take one month while disbursement of such a hefty amount is likely within one-month....

http://www.nation.com.pk/pakistan-news-newspaper-daily-english-online/business/23-May-2012/china-bank-approves-450-million-loan

Riaz Haq said...

Here's a BR report on WB and ADB financing infrastructure projects in Pakistan:

ISLAMABAD: Pakistan has signed eight new projects worth $2.24 billion with the World Bank while six projects of $69 million have been signed with Multi Donor Trust Fund (MDTF) during the last fiscal year.



Documents obtained by this correspondent showed that the Project of Tertiary Education worth $300 million, Social Safety Net TA Additional Financing of $150 million, Tarbela (Fourth Extension) worth $840 million, Punjab Irrigated Agriculture Productivity Project $250 million, Natural Gas Efficiency Project $200 million, Punjab Education Sector program worth $350 million, Sindh Skill Development of $21 million and Highway Rehabilitation Additional Financing project worth $130 million were signed between Pakistan and the World Bank during 2011-12.



The projects of Khyber-Pakhtunkhwa Emergency Road Recovery Project worth $8 million, Khyber-Pakhtunkhwa Fata Economic Revitalisation Project $20 million, KP Fata Governance Support Project of $6 million, Fata Rural Livelihood and Community Infrastructure worth $12 million, Fata Urban Centre Project of $7 million and the project of Revitalizing Health Services in Khyber-Pakhtunkhwa worth $16 million are the projects signed by Pakistan with MDTF.



Documents also showed that the Asian Development Bank’s (ADB) active portfolio in Pakistan comprised $3.3 billion in loans for 23 ongoing projects: $143 million in grants and $9.37 million in technical assistance as of June 30 this year. In terms of lending modality, the Multi tranche financing Facility accounted for 49 percent of the portfolio and project leans at 41 percent while disbursement achieved during FY 2011-2012 amounted to $429.4 million.



One of the key pillars of reform in the power sector of Pakistan is to enhance power generation, replacement of inefficient plants and improve the transmission and distribution system. In this regard, ADB has committed a financing facility of $2.9 billion over medium-term.



Documents also showed that the ADB organised 55 capacity-building initiatives for 2011-12 for Pakistan in areas of irrigation, energy, transport, environmental safeguards, gender statistics, poverty reduction, regulatory practices, financial inclusion approaches, sustainable and millennium development goals, taxation, public sector management, planning, budgeting and evaluation, foreign direct investment, procurement, project processing and regional integration.


http://www.brecorder.com/top-news/1-front-top-news/84391-pakistan-wb-sign-eight-new-projects-worth-224bn-.html

Riaz Haq said...

Here's a PakObserver report on Chinese investment in Pakistan:

Friday, March 29, 2013 - Islamabad—China is committed to invest heavily in Pakistan’s energy and other sectors to improve lives of people, Deputy Chief of Mission of the Chinese Embassy Yao Wen said Thursday.

Speaking at a function at a local school here, Yao Wen said Chinese are already working on 120 projects in Pakistan with around a quarter related to energy.

In addition, during the last five years volume of bilateral trade has grown by 70 per cent to over $ 12 billion with Pakistani exports increased two-fold from $1 billion to $2.2 billion, he informed.

Yao Wen stressed the need for enhancing collaboration between educational institutions and exchanges of students and researchers to promote intellectual cooperation.

Lauding the role of Pakistan in regional and global peace, stability and development, he said that Pakistan has offered great sacrifices to ensure peace.

Speaking on the occasion, President Ex-Chinese Association Raza Khan lauded the Chinese assistance and cooperation in various fields, terming it a great service to people of Pakistan.

He lauded the active involvement of Chinese Ambassador Liu Jian in capacity building of students and said that supporting needy students was a great service for social development. Raza Khan stressed the need for increasing people-to-people exchanges to promote understanding and carry forward cause of Pak-China friendship.

Terming China a sincere friend, Joint Secretary Ministry of Education Prof. Muhammad Rafiq Tahir said that two countries should fully unleash their potential of cooperation to benefit masses.


http://pakobserver.net/detailnews.asp?id=202003

Riaz Haq said...

Here's Express Tribune on private sector jumping in to add power generation capacity:

After five years of unbearably long daily power outages, Pakistan’s private sector has had enough: over the next five years, they plan on investing over $14.3 billion in increasing the nation’s power production capacity by nearly 46%, and they are doing so by investing in the cheapest possible sources of electricity.

According to data released by the National Electric Power Regulatory Authority (Nepra) in its 2012 State of the Industry report, private sector firms have already begun work on dozens of projects that would substantially increase the country’s electricity generation capacity. For the purposes of this special report, we include only those projects that are scheduled to be completed by the end of the next administration’s term in 2018.

If the next administration were to do absolutely nothing to prevent or slow down the progress currently being made on projects that are already approved and progressing, Pakistan’s power generation capacity will increase to 34,200 megawatts (MW), compared to the approximately 23,500MW today. Of that increase, more than 80% is coming through private sector initiatives.

Yet it is not just the private sector’s initiative that deserves to be applauded: it is also their foresight. Nearly all of the private sector projects scheduled to come online use the cheapest fuels possible. These firms are scheduled to add about 4,900MW to the nation’s hydroelectric power generating capacity, for example. Another 800MW will be added in terms of gas-fired thermal power plants. And nearly 3,000MW will be added or converted to coal and bagasse (a waste product from sugar manufacturing).

Residents of Karachi should rejoice in particular: the Karachi Electric Supply Company is converting 840MW of oil-fired thermal power stations to coal, which will dramatically increase the country’s only private utility’s ability to generate cheaper electricity. Put simply, this will mean even fewer power outages in Karachi.

The private sector’s focus appears not only towards fuel sources that are cheap, but also easily available. Natural gas, for instance, is possibly the cheapest source electricity, cost an average of Rs4.24 per kilowatt-hour, according to Nepra. But the bulk of the investment is going towards hydroelectricity, which, according to Nepra’s tariff determination, is expected to cost Rs5.43 per unit for the first 12 years of a project’s life, while the debt used to finance the plants is still being paid off, following which the tariff will be reduced to Rs2.47 per unit.

The preference for hydroelectricity has to do with the fact that Pakistan’s natural gas reserves are rapidly being depleted and importing gas is far more difficult than importing coal. Power plants that run on imported coal can produce electricity for an average of Rs10 per unit, according to industry experts, much cheaper than the Rs16 per unit that oil-fired thermal plants cost.

Compared to the $14.3 billion being invested by the private sector, the government is planning to invest just over $2.5 billion over the next five years to upgrade its power infrastructure, which will add about 2,100MW of electricity generating capacity over the next five years, the overwhelming bulk of which will be in thermal power plants that can run on both oil and gas.

The picture, of course, is not completely rosy. Power projects are notorious for not meeting their deadlines so it is possible that the next administration will not see all of these projects come to fruition during its term. But given the private sector’s commitment to solving Pakistan’s energy problems, the least the government can do is not create hurdles in their way. It will only help their own re-election chances.


http://tribune.com.pk/story/532404/energy-power-generation-capacity-expected-to-jump-46-by-2018/

Riaz Haq said...

Here's a WSJ story on Pakistan buying two more nuclear reactors from China:

Pakistan is acquiring two large nuclear power reactors from longtime ally China, officials said, in a $9.1 billion deal that has raised concern in Washington that Beijing is overstepping international rules on transferring nuclear technology.

For Islamabad, the pact with China counters the nuclear energy accord New Delhi signed with the U.S. under then-President George W. Bush. Pakistan regards that arrangement as providing India with an unfair potential strategic advantage for nuclear weapons. Both countries possess a nuclear arsenal.

There is unease in the U.S. and elsewhere over the security of sensitive facilities in Pakistan, where Islamist militants have shown they can attack even the most heavily guarded installations, analysts said. There is also concern the Chinese are willing to circumvent rules locking out countries from nuclear trade if, like Pakistan, they aren't part of to the nonproliferation treaty.

Pakistani officials haven't talked publicly about this latest agreement, which was quietly signed around midyear and closed in early July.
---
The reactors covered by the deal would be technologically advanced and built outside the main port city of Karachi. They each would provide 1,000 megawatts of electricity, a big boost for power-starved Pakistan. "Every country has this. We are also entitled," the senior official said. "We have to focus on adding cheaper energy supply."

China would deliver the first reactor in 70 to 80 months, with the second coming 10 months later. Nuclear reactors take several years to build. They would be installed on the Karachi coast close to a small existing reactor, the senior Pakistani official said. The Chinese will provide 82% of the financing through a loan on what another Pakistani official described as very soft terms.
------------

With the 2005 U.S.-India Civil Nuclear Agreement India, which also isn't part of the nonproliferation treaty, won an NSG exemption to buy nuclear power technology. But legal complications have subsequently stalled the anticipated sale of American nuclear plants to India. These obstacles include the liability for compensation for accidents that now exists under Indian law, following the deadly 1984 accident at a chemical plant owned by Union Carbide, a U.S. company, in the Indian city of Bhopal. But Pakistan has objected to the pact.

Still, Pakistan, which is in a nuclear arms race with India says that accord was discriminatory. "The U.S.-India nuclear deal was very disturbing for the strategic stability of this region," said Sarwar Naqvi, a former Pakistani ambassador to the IAEA. "It put Pakistan at a disadvantage. It freed Indian uranium to be diverted to their military program."

Carnegie Endowment's Mr. Hibbs said that the design of the new 1,000-megawatt reactors that Pakistan will receive is untested, even in China. He added that the price tag doesn't suggest that Islamabad is getting any "bargain." There wasn't competitive bidding on the project.

-----
As part of his speech to the United Nations General Assembly last month, Prime Minister Sharif called for Pakistan to be allowed to join the Nuclear Suppliers Group. "Pakistan qualifies for full access to civil nuclear technology for peaceful purposes, to meet its growing energy needs," Mr. Sharif said.


http://online.wsj.com/article/SB10001424052702304561004579137420511807840.html

Riaz Haq said...

Here's an AFP story on Chinese financing big-money projects in Pakistan:

Pakistan's recent launch of work on its largest nuclear power plant is the latest example of big-money Chinese infrastructure projects in the troubled nation.

Pakistan, plagued by a homegrown Taliban insurgency, is battling to get its economy back on track and solve a chronic energy crisis that cripples industry.

Politicians in Beijing and Islamabad are fond of extolling the profundity of their friendship in flowery rhetoric and on the ground this has translated into around 10,000 Chinese engineers and workers flocking to Pakistan.

Chinese companies are working on more than 100 major projects in energy, roads and technology, according to Pakistani officials, with an estimated US$18 billion expected to be invested in the coming years.

"Some projects are being done by the government, then most of the projects are being done by the Chinese companies, by the provinces and also with the state enterprises and authorities," said Ahsan Iqbal, Pakistan's federal minister for planning and development. "In the energy sector, Chinese engineers are building up to 15 power projects that include hydel [hydroelectric], thermal and nuclear plants."

Pakistan faces an electricity shortfall of around 4,000 megawatts in the sweltering summer, leading to lengthy blackouts that make ordinary people's lives a misery and have strangled economic growth.

To combat the crisis, Pakistan has sought Chinese help in building power-generation projects across the country, including nuclear. Aside from the 2,200MW project near Karachi recently launched by Prime Minister Nawaz Sharif, Chinese companies built two of Pakistan's three operational reactors. Chinese engineers are also busy in the construction of a 969MW hydropower project in Kashmir. They have also committed to generate 6,000MW of electricity from coal and wind in southern Sindh province.

But co-operation goes beyond energy. Visiting in May during his first overseas trip after taking office, Premier Li Keqiang linked growth in his country's restive west with that in Pakistan, saying the two sides wanted to create an "economic corridor" to boost development.

The concept involves improving road and rail networks to link China through Pakistan to the Arabian Sea and Iqbal said its benefits would extend to other neighbouring countries.

"The biggest flagship project is going to be the economic corridor," he said. "I hope with its completion, we will be able to create opportunities not just for China and Pakistan but for the entire region."


http://www.scmp.com/news/china/article/1376341/string-big-money-projects-china-deepens-ties-pakistan

Riaz Haq said...

Here's Reuters on China financing nuclear power plants in Karachi:

China has committed $6.5 billion to finance the construction of a major nuclear power project in Pakistan's port city of Karachi as it seeks to strengthen ties with its strategic partner, Pakistani officials said.

Pakistani Prime Minister Nawaz Sharif broke ground on the $9.59 billion project last month but officials have provided few details of how they plan to finance it.

Financing documents seen by Reuters showed China National Nuclear Cooperation (CNNC) has promised to grant a loan of at least $6.5 billion to finance the project which will have two reactors with a capacity of 1,100 megawatts each.

Two members of the government's energy team and three sources close to the deal confirmed this. CNNC was not available for comment.

"China has complete confidence in Pakistan's capacity to run a nuclear power plant with all checks in place," said Ansar Parvez, chairman of the Pakistan Atomic Energy Commission which runs the civilian nuclear program.

"As things stand, the performance and capacity of nuclear power plants in Pakistan is far better compared to non-nuclear plants."

Parvez declined to give more details of the funding but said it would be completed by 2019 and each of the two reactors would be larger than the combined power of all nuclear reactors now operating in Pakistan.

As part of the deal, China has also waived a $250,000 insurance premium on the loan, said two sources in the Energy Ministry with knowledge of the project. They declined to be identified as they are not authorized to speak to the media about the financing.

Pakistan and China, both nuclear-armed nations, consider each other close friends and their ties have been underpinned by common wariness of India and a desire to hedge against U.S. influence in South Asia.

Pakistan sees nuclear energy as key to its efforts to solve power shortages that have crippled its economy. Pakistan generates about 11,000 MW of power while total demand is about 15,000 MW.

Blackouts lasting more than half a day in some areas have infuriated many Pakistanis and sparked violent protests, undermining an economy already beset by high unemployment, widespread poverty, crime and sectarian and insurgent violence.

Under its long-term energy plan, Pakistan hopes to produce more than 40,000 MW of electricity through nuclear plants by 2050.

The United States sealed a nuclear supply deal with India in 2008, irking both China and Pakistan....


http://www.reuters.com/article/2013/12/24/us-pakistan-china-nuclear-idUSBRE9BN06220131224

Anonymous said...

LAHORE: Chief Minister Punjab Shahbaz Sharif has stated that China had shown willingness to invest $30 billion in the energy sector in Pakistan, Geo News reported.

In an exclusive interview with Geo News programme Aaj Kamran Khan Kay Sath, Shahbaz Sharif said China would provide the historic assistance of $30 billion for power generation in the country, however, Pakistan would identify the projects.

http://www.thenews.com.pk/article-139040-China-to-invest-$30bn-in-energy-sector-in-Pakistan

Riaz Haq said...

Here's an Express Tribune report on Pakistan's participation in Nuclear Security Summit 2014 in The Hague:

Prime Minister Nawaz Sharif appealed on Monday for international cooperation and assistance that will give his country access to nuclear technology for a civilian energy programme — the lynchpin of its strategy to overcome chronic energy shortages.
“Energy deficit is one of the most serious crises facing Pakistan,” PM Nawaz told delegates at the third Nuclear Security Summit in The Hague. “As we revive our economy, we look forward to international cooperation and assistance for nuclear energy under IAEA safeguards,” he said.
Leaders from 53 countries, US, EU, International Atomic Energy Agency and Interpol are attending the nuclear summit.
The prime minister also called for Pakistan’s inclusion in all international export control regimes, especially the Nuclear Suppliers Group. International treaties and forums, according to him, should supplement national actions to fortify nuclear security.
At the same time he reiterated “the highest importance” that his country attached to nuclear security. because it was directly linked to the country’s national security.
“Pakistan is a responsible nuclear weapons state and pursues a policy of nuclear restraint, as well as credible minimum deterrence,” he said.
“Our region needs peace and stability for economic development that benefits its people. That is why, I strongly advocate nuclear restraint, balance in conventional forces and ways to resolve conflicts,” the prime minister said.
The prime minister paid tribute to US President Barack Obama for launching the nuclear security summit process four years ago. Pakistan has been running a safe, secure and safeguarded civil nuclear programme for more than 40 years and the country has the expertise, manpower and infrastructure to produce civil nuclear energy.
--------------
He said Pakistan’s nuclear materials, facilities and assets were safe and secure and the country’s nuclear security regime was anchored in the principle of multi-layered defence for the entire spectrum – insider, outsider or cyber threat.
Islamabad has established a centre of excellence that conducts intense specialised courses in nuclear security, physical protection and personnel reliability, he said, adding that Pakistan was ready to share its best practices and training facilities with other interested states in the region and beyond.
Dealing with radiological threats
He said his country had also deployed radiation detection mechanisms at several exit and entry points to prevent illicit trafficking of radioactive and nuclear materials.
Similarly, he said, all countries should continue to take measures to secure their nuclear facilities and materials and prevent any perceived nuclear terrorist threat. “We all need radioactive sources for hospitals, industry and research; but should be vigilant about radiological threats,” he added.


http://tribune.com.pk/story/686956/hague-summit-nawaz-makes-case-for-civil-nuclear-energy/

Riaz Haq said...

Here's a Dawn story on World Bank report on infrastructure deficiency in South Asia:

ISLAMABAD: South Asia should spend as much as $2.5 trillion on infrastructure by 2020 to bring its power grids, roads and water supplies up to the standard required to serve its growing population, said a World Bank report on Wednesday.

“If South Asia hopes to meet its development goals and not risk slowing down — or even halting — growth, poverty alleviation and shared prosperity… it is essential to make closing its huge infrastructure gap a priority,” the report said in probably the first analysis of the region’s infrastructure needs.

The report, entitled “Reducing poverty by closing South Asia’s infrastructure gap”, says that “infrastructure deficiencies in South Asia are enormous, and a mix of investment in infrastructure stock and implementing supportive reforms will enable the region to close its infrastructure gap”.

Pakistan should invest $165 billion over ten years in improving infrastructure in transport, electricity, water and sanitation, solid waste, telecom and irrigation sectors, according to the report.

For the required investment in electricity sector of up to $96bn, Pakistan should generate funds through government-private sector partnership, the report said.

The average share of Pakistan in the total infrastructural investment in South Asia is only 12 per cent compared to 79 per cent by India, the report says.


http://www.dawn.com/news/1097656/s-asia-should-spend-more-to-serve-its-growing-population-report

Riaz Haq said...

From Wall Street Journal:

ISLAMABAD—Pakistan plans to sign deals worth billions of dollars with China for development of infrastructure and energy projects during Prime Minister Nawaz Sharif ’s visit to Beijing this weekend, Pakistani officials said.

Mr. Sharif is to meet the Chinese leadership on the sidelines of the Asia-Pacific Economic Cooperation summit, which starts in Beijing this week. Pakistan suffers from a crippling shortage of electricity and it is looking to its close ally China for a solution.

The agreements are part of a bigger aim to establish a Pakistan-China economic corridor that will link south west China, by road and rail, to the Pakistani port of Gwadar, giving China a harbor close to the Middle East, a $35 billion program in total.

“Pakistan and China have strong relations and we’ve now decided to take this relationship to the next level of strategic economic cooperation,” Ahsan Iqbal, Pakistan’s Planning Minister, said in an interview.

Mr. Iqbal said the Pakistani side’s focus in Beijing will be on energy, with agreements or memorandums to be signed on a series of specific power projects. He said that previously, negotiations had been over the broad framework for the proposed economic corridor.

“The Chinese have agreed to invest at a critical time, when Pakistan is really starved of energy,” said Mr. Iqbal.

Mr. Sharif will sign agreements on 14 power plants, that will provide the country with 10,400 Megawatts of new generation, said Musadiq Malik, the spokesman for the prime minister. The Chinese companies will invest in building the power stations as commercial ventures, raising their own financing, as foreign direct investment, so Pakistan won't be taking on any additional debt, Mr. Malik said.

Another official said that two of the power plant projects are sufficiently developed to begin work on the ground within the next 12 months. The plants are mostly coal-fired.

Building power stations on that scale would cost at least $10 billion, experts said. Pakistan will also need to upgrade its electricity transmission network and build facilities to import and transport the huge quantities of coal that would be required.

Pakistan’s daily electricity output is generally 13,000 MW to 15,000 MW, leaving it at least 5,000 MW short of demand. That deficit means hours of rolling supply cuts to homes and businesses every day across the country, a situation that economists estimate slashes several percentage points off national income.

Aside from China, Pakistan has struggled to attract other foreign investors to its energy sector. Pakistan’s current generation is based on oil-fired stations, which are expensive to run, and gas-power plants that are stymied by a shortage of gas in the country. Pakistan now plans to build plants that use coal, along with limited solar and wind power projects, officials said.

“We have received a signal from the Chinese that these [power] projects are ready to proceed,” Mr. Sharif told a cabinet meeting Thursday, in televised remarks. “These power stations will start to be built, but to complete them it will take about 3½ years.”

http://online.wsj.com/articles/pakistans-sharif-heading-to-beijing-to-sign-energy-infrastructure-pacts-1415293363

Riaz Haq said...

From India Today:

A Chinese official has confirmed that China is involved in as many as six nuclear power projects in Pakistan and is likely to export more reactors to the country, indicating that the much debated civilian nuclear cooperation between the two countries will go ahead despite concerns voiced that it is in contravention of Nuclear Suppliers' Group (NSG) guidelines.

While China has in the past declined to confirm or share details regarding the extent of its on-going civilian nuclear cooperation with Pakistan, a top official of the National Development and Reform Commission (NDRC), the planning body, was quoted as saying on Saturday that Beijing has been involved in the construction of six reactors in Pakistan.

Wang Xiaotao, vice-minister of the NDRC, was quoted as saying by State media that the NDRC was keen to support further exports to Pakistan and other countries. To this end, the NDRC is drawing up new guidelines to announce supportive financial policies for exports in the nuclear sector. Railways exports would also be supported under the new guidelines, Wang said.

Announcing the guidelines at a Beijing press conference, Wang said that China "has assisted in building six nuclear reactors in Pakistan with a total installed capacity of 3.4 million kilowatts". China was also exporting nuclear technology to Argentina, with the two countries on Wednesday signing a deal for exporting heavy-water reactors.

China's recent projects with Pakistan have come under scrutiny as the NSG does not allow members to supply nuclear technology to countries that have not signed the Nuclear Non-Proliferation Treaty (NPT). India had to seek a waiver from the NSG for its civilian nuclear cooperation with the US, and obtained one only after undertaking a range of commitments.

China only declared the first two reactors it had constructed for Pakistan, Chashma-1 and Chashma-2, at the time of joining the NSG, according to Indian and American officials.

In 2009, the China National Nuclear Corporation signed agreements for two new reactors, Chashma-3 and Chashma-4. The deals became a matter of controversy and were debated at the NSG, with China arguing that the reactors were "grandfathered" as part of its earlier Chashma agreement and were not new projects per se. China also argued that the deals were under International Atomic Energy Agency (IAEA) safeguards and were legitimate.

The two countries last year announced they would undertake a new project in Karachi, with Pakistani media reports saying China would provide $ 6.5 billion to finance two reactors there. At the time, Beijing declined to confirm those reports.

While the Chinese Foreign Ministry has, in the past, argued that China's cooperation with Pakistan "did not violate norms of the NSG", Beijing's main argument was that the Chashma reactors were part of an earlier deal. With China going ahead with building two new reactors in Karachi, it remains to be seen how Beijing will explain the deals' validity under NSG guidelines.



Read more at: http://indiatoday.intoday.in/story/china-pakistan-nuclear-projects-beijing-chashma-atomic-energy/1/417661.html

Riaz Haq said...

Chairman China’s Three Gorges (CTG) Corporation Chun Lu has planned to invest $10 billion in Pakistan initially that will ultimately jack up its investment up to a whopping $100 billion on long-term basis with focus on the energy sector.

The Chairman, CTG Board of Directors, Chun Lu, leading a nine-member delegation had a meeting with the Finance Minister, Senator Ishaq Dar, here on Tuesday and disclosed its plan of investment. A four-member IFC team also attended the meeting.

During discussion, Chun Lu said the CTG had plans to invest 10 billion dollars in Pakistan, ultimately taking up the investment to 100 billion dollars in the long run with focus on the energy sector.

He said the CTG had entered into collaboration with the IFC forming CSAIL (China Three Gorges South Asia Investment Limited) and both of them would undertake energy projects in Pakistan. The CTG chairman said they already had undertaken investment in projects which would generate 3,000MW electricity, and had plans for further such ventures in collaboration with the Pakistani side. He also evinced keen interest in investing in the ongoing projects.

Finance Minister Ishaq Dar welcomed the investment plans of CTG and their collaboration with the IFC for projects in Pakistan. He said the government attached due importance to its ties with China and wished this strong relationship could be translated into a robust economic partnership.

He said CTG’s 100 billion dollar investment plan would greatly add to realisation of this objective.Both the sides agreed to form their respective teams to discuss modalities for CTG’s investment ventures in Pakistan. The finance minister nominated senior officials from the Ministry of Finance, Ministry of Water & Power and the FBR for detailed discourse with the CTG team. He said all possible cooperation and facilitation would be offered to the CTG for investment in Pakistan.

http://www.thenews.com.pk/Todays-News-13-36340-Chinas-Three-Gorges-Corp-plans-to-invest-$10-bn-in-Pakistan

Riaz Haq said...

Dome installed at #Karachi unit 3 - first export of #China's Hualong One #nuclear reactor design, with construction of unit 2 beginning in 2015 and unit 3 in 2016. The units are scheduled for commercial operation in 2021 and 2022. #Pakistan http://www.world-nuclear-news.org/Articles/Dome-installed-at-Pakistan-nuclear-plant

Karachi 2 and 3 are the first export of China's Hualong One pressurised water reactor design, with construction of unit 2 beginning in 2015 and unit 3 in 2016. The units are scheduled for commercial operation in 2021 and 2022, respectively.

Karachi 3's dome - 23.4 metres high, with a diameter of 46.8 metres and weighing about 388 tonnes - was hoisted into place in the morning of 29 September, China National Nuclear Corporation (CNNC) said. The unit's nuclear island was completed in June, and "pre-introduction" of major components, including the reactor pressure vessel and steam generators, was completed earlier in September. Unit 3's nuclear island was completed in a shorter time than it took to complete the same work for unit 2.

In addition to the two units under construction at Karachi, four Hualong One units - also known as HPR1000 - are being built in China. Fanchenggang 3 and 4 and Fuqing 5 and 6 are all expected to enter commercial operation in 2019-2020.

Pakistan currently has 1355 MWe of nuclear generating capacity from five operating units: a small pressurised heavy water reactor at Karachi, and four Chinese-designed pressurised water reactors at Chashma. A third 1161 MWe Hualong One unit is planned for construction at Chashma.

Riaz Haq said...

Outer dome installed at Karachi 2
18 June 2019


The outer safety dome has been installed on the containment building of unit 2 at the Karachi nuclear power plant in Pakistan. The unit is the first of two Chinese-supplied Hualong One reactors being built at the site.



https://www.world-nuclear-news.org/Articles/Outer-dome-installed-at-Karachi-2

The steel dome - measuring about 53 metres in diameter and over 23m in height, and weighing about 366 tonnes - was placed upon the top of the containment building walls at 8:06am yesterday, China National Nuclear Power (CNNP) has announced.

The Hualong One uses a double-layer safety shell design. Together with the inner protective dome, the outer dome protects the reactor and prevents the release of radioactive materials into the environment in the event of a serious accident.

"The successful hoisting of the outer safety dome has marked the end of the main structural project of the nuclear power plant, which has created favourable conditions for the overall test and thermal test of the subsequent containment," CNNP said.

Karachi 2 and 3 are the first export of China's Hualong One design, with construction of unit 2 beginning in 2015 and unit 3 in 2016. Installation of the reactor internals at unit 2 was completed in January this year. The units are scheduled for commercial operation in 2021 and 2022, respectively.

In addition to the two units under construction in Pakistan, four Hualong One units are being built in China. China National Nuclear Corporation is constructing two units at its Fuqing plant in Fujian province, while China General Nuclear (CGN) is building two at its Fangchenggang site in Guangxi province. All four units are expected to enter commercial operation in 2019-2020.

CGN proposes to use a UK version of its Hualong One design - the HPR1000 - at a prospective new nuclear power plant at Bradwell, England.