Delays hike up CPEC project cost

At a time when the Shehbaz Sharif government is struggling to make a strategic shift from imported coal for electricity generation to Thar coal, the recent National Electric Power Regulatory Authority (Nepra) decision to revise upwards the total project cost and tariff of the proposed 300 megawatt Gwadar power project based on imported coal is quite surprising. The proposed shift from imported to local coal is part of the wider reforms being supported by the International Monetary Fund (IMF) to reduce the country’s power sector debt, known as “circular debt”, which represents the build-up of unpaid energy bills in the power sector. Pakistan formally requested the Chinese authorities’ support for this transition during a visit of Finance Minister Mohammad Aurangzeb and Energy Minister Awais Khan Leghari to Beijing last month.