$2 Bln Can Be Saved By Closing Oil Run Power Plants: Khaqan

ISLAMABAD, (UrduPoint / Pakistan Point News - 23rd Oct, 2018 ) :Former prime minister Shahid Khaqan Abbasi on Tuesday suggested that the government could save $2 billion by closing the oil-fuelled power plants and producing electricity from three coal-based plants to make yearly repayment to China for the China Pakistan Economic Corridor (CPEC) projects.

Speaking at a press conference flanked by Pakistan Muslim League-Nawaz (PML-N) spokesperson Marriyum Aurangzeb, he said the average cost of loan for the CPEC projects was 2.4 percent for a term of 20 to 25 years contrary to 8 percent reported in newspapers.

He claimed it was the cheapest funding in the history of Pakistan. If the element of grants was included in it the cost of funding dropped down to less than 2 percent.

He said coal based plants were set up with a clean environment technology." The International Monetary Fund (IMF) stated that it would not give loans to Pakistan to pay off Chinese loans. While Pakistan would have to pay less than $ one billion every year for the projects till 2023, and after that repayment would not be more than $2 billion, he added.

Referring to the three coal based power projects in Sahiwal, Port Qasim and Hub, the former prime minister said if the oil run plants were closed down, $ 1.2 billion could be saved by producing 20 billion kilowatts every year from Sahiwal and Port Qasim Power plants, which were operational.

When the third plant in Hub would start producing power the saving could be of $ two billion per year. The yearly repayment of CPEC projects could thus be done with the amount saved, he added.

Khaqan said the import of costly furnace oil was stopped last November but the interim government restarted it again. If the present government decided to stop import of furnace oil, it could use much cheaper alternative energy that would benefit the economy.

He said he brought cheap LNG to Pakistan by signing an agreement with Qatar and complete details of which were presented before the Parliament.

He said under CPEC, $7 billion was allocated for the rail project, facilities of Gwadar Port were developed and Gwadar Airport was being built.

He said it was left to the provincial governments to set up their industrial zones while the Federal government planned to establish industrial zones in Islamabad, Gwadar and Port Qasim Karachi.

He said Pakistan and China were the strategic partners of CPEC and other countries could become part of it with their consent. The precedent was there as the power plant in Karachi had investment of Qatar and private investment from Pakistan was made in the Hub power plant, he added.

Shahid said in some projects Chinese companies had their equity while in others viability gap funding was made by the Pakistan government.