ISLAMABAD: In the midst of dispute surrounding the expansion of a 20 MW hydropower project to 40 MW, the Center is helping the Gilgit-Baltistan government establish an energy development organization and an energy regulatory authority in order to fully use the region’s hydropower potential.
According to Dawn’s informed sources, the clearance of the 40MW Hanzel Hydropower Project in Gilgit was postponed at a recent meeting of the Central Development Working Party (CDWP) because of concerns surrounding the project’s increased capacity without previous approval from the appropriate forums. Construction has not yet started, but the project’s cost has grown from Rs12.1 billion in May 2021 to Rs20.23 billion in December 2023.
The Planning Commission expressed support for the capacity boost but expressed concerns because a firm had already been granted a contract for 20 MW, and they advised raising it to 40 MW. Moreover, the same company was awarded the 40MW contract without another round of bidding, permission from the necessary authorities such as the CDWP and the Executive Committee of the National Economic Council (Ecnec), which had approved the 20MW project, or clearance from the Pakistan Engineering Council.
The 20 MW project was previously approved by the Ecnec under strict guidelines that included creating a regional grid, an independent transmission and distribution company, changing the electricity tariff structure, and coming up with a better system for collecting electricity revenue and lending out foreign loans.
Center delays 40 MW project approval due to worries and higher costs
Meanwhile, the neighborhood filed a complaint alleging that the Public Procurement Regulatory Authority (PPRA) and the Planning Commission had violated their respective norms throughout implementation. Prior to project approval and execution, the GB government has been instructed by the central government to resolve these difficulties as soon as possible.
According to sources close to the Planning Commission, the GB administration had already drafted the Gilgit-Baltistan Energy Development Organization (GBEDO) Act and the Gilgit-Baltistan Electricity Regulatory Authority Act, which were recommended by advisors and endorsed by the center. Before being officially passed into law by the GB Legislative Assembly, the two draft acts have already been sent to the Gilgit-Baltistan Reforms Commission (GBRC), which will then convey its recommendations to the GB Cabinet.
Two separate departments will be established during the post-legislation phase. Along with a distribution firm exclusive to GB, the GBEDO will have the authority to create several generation companies and deregulate functions. Concurrently, the GB energy regulator will be responsible for managing the energy industry, guaranteeing independence in investment choices, and setting rates.
This regulatory body’s main goal is to bring Gilgit-Baltistan’s current tariff system into compliance with national regulations. The completion of both legislative initiatives by June of this year would represent a significant step toward the creation of a more transparent and efficient energy sector in GB, which is not connected to the national grid and relies primarily on small, isolated hydropower plants situated atop rivers and nullahs to meet its electricity needs.
Even while the GB region is one of the most sought-after travel destinations both domestically and abroad, there is now a severe power shortage, particularly during the winter. According to the project specifications, there might be a shortfall of more than 70MW (excluding thermal energy) in the winter, especially in January and February. The Center has allotted special funds of Rs39.5 billion in the federal development budget for the current year, FY24, to achieve balanced regional development and uplift.
The Hanzel Power Project will feature a grid station and a 20-kilometer-long, 132kV transmission line of its own for the distribution and transportation of electricity. The grid station located near Hanzel will incorporate the electricity from this grid into the current distribution system. The federal government has previously approved the “Establishment of Regional Grids,” another connected project, earlier this year, and it is currently in the execution stage.
