China provides assistance for Chashma units

Multan: China has provided financial and technical assistance to Pakistan for the construction of Chashma-1 (C-1) and Chashma-2 (C-2) and each has a capacity of producing 340 megawatts electricity.

Chashma-2 has not yet been completed and it is expected to start working on by the end of the next fiscal year. 'These two new units will increase electricity production by 680 megawatts, which will greatly help uplift the economy,' added the official.

Moreover, they said that China will bear 85 per cent cost for the construction of two more power reactors, Chashma-3 and Chashma-4 by extending suppliers' credit, which will help generate additional electricity up to 680 megawatt over the next seven years to overcome energy crisis in Pakistan, it is learnt here on Wednesday.

According to well-placed official sources, Pakistan and China are going to finalise the modalities of the supplier credit for C-3 and C-4 during the upcoming visit of President Asif Ali Zardari, who will leave for China on Friday (tomorrow) along with the Chinese engineer who was released by the militants. During the last visit of President Zardari, China and Pakistan had signed a deal for C-3 and C-4 and now finalisation of related modalities will be on the agenda of the upcoming visit.

In the Public Sector Development Program (PSDP) for 2008-09, the government had estimated the cost of C-3 and C-4 worth Rs 129.905 billion, with foreign currency component of Rs 80.360 billion. The government has allocated Rs 220 million for the C-3 and C-4 in the current fiscal year 2008-09.

'The cost of the C-3 and C-4 has already gone up from Rs 129 billion to over Rs 140 billion mainly because of depreciation of rupee against dollar in the ongoing fiscal year,' a high-level official in the Planning Commission confirmed. China has already installed a 325-megawatt reactor at Chashma and is currently working on another with the same capacity that is expected to begin producing by 2009-10.

Pakistan is currently facing a power shortage of 4,000 to 5,000 megawatts, resulting in torturous load shedding for hours in a day. According to Energy Security Plan up to 2030, the energy mix is quite crucial for Pakistan and in the future the energy share from nuclear will be increased from 400 MW to 8800 MW till 2030.

The official also confirmed that Islamabad would table its formal proposal before the Chinese authorities for finalising the provision of supplier credit. Supplier credit means that the Government of Pakistan would give a guarantee to the Chinese government and Beijing authorities would extend its guarantee to its official bank for repayment of the amount.

The Chinese companies will complete the work on C-3 and C-4 and the Chinese official bank will repay the amount when the company will submit the bills after the completion of various phases of the project. Though the government had allocated a nominal amount for C-3 and C-4 in the current fiscal year's PSDP, keeping in view the importance of this project, the government could provide Rs 3 to 4 billion before June 30, 2009 in a bid to make this project operational, official said.