The cost of two units of 680MW Chashma Power Project has been increased to Rs 233 billion from Rs 189 billion, according a proposal presented to the Executive Committee of the National Economic Council. Sources said the revised position paper of the project submitted to the ECNEC chaired by Finance Minister Muhammad Ishaq Dar on May 10, 2017, along with the reasons which led to cost escalation, was deferred.

The proposal reveals that Rs 29.02 billion cost of the main contract was increased due to increase in foreign exchange rate, Rs 5.62 billion due to local currency linkage with the US dollar and sponsors now feel it should be considered as foreign exchange component.

Additionally, cost of auxiliary contracts increased by Rs 5.70 billion due to an increase in foreign exchange rate and cost of the local component and sponsoring agency (PAEC) scope of work increased by Rs 3.40 billion due to increment in the salaries of employees, utilities bills on account of increment in the unit price of electricity, rates of the construction material, increase in purchase cost of vehicles, as well as cost increase of local equipments, machinery and rate of duties and insurance became higher.

Of the overall increase of Rs 43.74 billion cost, Rs 14.7 billion are being paid through Public Sector Development Programme (PSDP). As per PC-1, the cost of the project was Rs 189.918 billion and Rs 205.201 billion have been utilised with expected completion cost of Rs 233.165 billion.

The project consists of setting up 680MW (gross) installed capacities consisting of two additional units with net capacity of 315MW each at the existing Chashma site in district Mianwali. The contract for 680MW C-3/C-4 was signed in November 2008 between Pakistan Atomic Energy Commission (PAEC) and China Zhongyuan Engineering Corporation (CZEC). The ECNEC considered the summary dated March, 2009, submitted by the Planning Commission/ Ministry of Planning, Development and Reform on "Chashma Nuclear Power Project Units-3 and 4(C-3 & C-4) of 340MW each and approved the project at a cost of Rs 189,918.29 million with a foreign exchange component (FEC) of Rs 139,706.93 million."

Chashma Nuclear Power Projects Unit-3 and Unit-4 (C-3/C-4) are located at district Mianwali in the vicinity of C-1 and C-2 power plants. These power plants have already been in operation since 2000 and 2011 respectively. The operation record of C-1 and C-2 plants led to the signing of C-3/C-4 NPP in 2008 and the implementation of C3/C-4 project formally started on March 31, 2010. The ECNEC was told that C-3 has already been commissioned on December 31, 2016, while C-4 will be commissioned on October 31, 2017.

The CDWP in its meeting held on February 7, 2017 considered the project and forwarded the position paper to ECNEC for approval with a revised project at a total cost of Rs 233.661 billion including an FEC of Rs 207.319 billion. The minister for planning, development & reform / deputy chairman Planning Commission has seen and authorised submission of the summary to the ECNEC.

Copyright Business Recorder, 2017