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It is a power and energy company. I was supposed to make a project management analysis of it.
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Project Management of
a Power and Energy
Company
TABLE OF CONTENTS
PAKISTAN: AN OVERVIEW OF POWER SECTOR.........................1
1.1 POWER SECTOR IN PAKISTAN.........................................1
1.2 INDICATIVE FORECASTED DEMAND AND SUPPLY.............2
1.3 MAIN PLAYERS OF PAKISTAN POWER SECTOR.................3
1.4 OBJECTIVES OF POWER POLICY PAKISTAN.......................3
1.5 SCOPE OF POWER POLICY PAKISTAN..............................3
1.6 PROJECT PROCESSING FEATURES...................................4
1.6.1 SOLICITED PROPOSALS...............................................4
1.6.2 PROCESSING OF RAW SITE PROPOSALS.....................5
CHAPTER 2............................................................................6
THE PROJECT NAME, SPECIFICATION.......................................6
2.1 PROJECT NAME AND SPECIFICATION...............................6
2.2 THE PARENT COMPANY STRUCTURE...............................7
2.3 HABIBULLAH GROUP DIRECTORS....................................7
2.4 QUETTA POWER PROJECT:..............................................8
2.5 RESPONSIBILITIES OF DIRECTORS..................................8
2.6 FUTURE ENDEAVORS: CAPACITY EXPANSION OF THE EXISTING 157 MW COMBINED CYCLE GAS POWER PLANT AT QUETTA..............................................................................9
2.7 AFFILIATED COMPANIES HABIBULLAH GROUP.................9
CHAPTER 3:.........................................................................11
HYDEL POTENTIAL IN BALUCHISTAN......................................11
CHAPTER 4..........................................................................14
PROJECT TEAMS, CONTRACTORS AND SUB CONTRACTORS.....14
3.1 ORGANIZATION CHART OF HEL PARENT COMPANY.........14
3.2 ALSTOM POWER EPC CONTRACTOR...............................15
3.3 ALSTOM EMPLOYEES BY REGION..................................15
3.3 ALBARIO ENFINNERING LTD..........................................16
3.4 LIST OF FAMOUS PROJECTS PAKISTAN..........................16
3.5 ALBARION AND HABIBULLAH ENERGY LTD.....................17
CHAPTER 5..........................................................................18
PROJECT PLANNING IN BRIEF................................................18
CHAPTER 6..........................................................................19
MAJOR STAKEHOLDERS & SCORING MODELS.........................19
6.1 BANKS........................................................................19
6.2 CONTRACTORS............................................................19
6.3 GOVERNEMENTAL BODIES............................................19
6.4 HISTORICAL FINANCIAL RATIOS FOR THE RECENT YEAR. 19
6.5 SCORING.....................................................................19
6.6 SPECIALIST FIRM FOR CONDUCTING THE FEASILBLITY STUDY..............................................................................20
CHAPTER 7..........................................................................22
CONFLICT & NEGOTIATION ISSUE..........................................22
CHAPTER 8..........................................................................23
PROJECT SCHEDULING..........................................................23
8.1 PROJECT MANAEBMENT................................................26
8.2 PROJECT HUMAN RESOURCE REQUIREMENT..................26
8.3 THREE PHASE PROGRAM..............................................27
CHAPTER 9..........................................................................28
PROJECT COST ESTIMATION..................................................28
9.1 FEAAILBILITY OF THE PROJECT.....................................28
9.2 PROJECT COST ESTIMATION..........................................29
CHAPTER 10........................................................................31
PROJECT PC I, PC II, PC III AND PC IV SPECIFICATIONS............31
10.1 PC I.............................................................................31
10.2 PC II (SURVEY AND FEASIBILY STUDIES)......................33
10.3 PC III (ANNUAL TARGETS AND PROJECT REPORTING) (1ST JULY OF EACH YEAR)..........................................................34
10.4 PC IV (PROJECT COMPLETION REPORT).........................35
CHAPTER 11........................................................................37
WORLD BANK COMMENT ON PAKISTAN ENERGY SECTOR:.......37
CHAPTER 1
PAKISTAN: AN OVERVIEW OF POWER
SECTOR
1.1 POWER SECTOR IN PAKISTAN
Pakistan is a progressive nation with a buoyant economy is located in one of the most
important economic zones of the world and provides excellent combination of natural and
human resources for the prospective investor.
The generation, transmission and distribution and retail supply if electricity is presently
undertaken by 2 units namely WAPDA and KESC. The power wing of WAPDA is being
restructured with the ultimate goal to make power sector stronger.
The transmission system of WAPDA and KESC are interconnected through 220 kV
double circuit line. Presently total installed electricity generation capacity is about 19478
MW. The future forecast for electricity demand is about 5500 MW in future. This will
further increase in the year 2010.
Figure 1
1.2 INDICATIVE FORECASTED DEMAND AND SUPPLY
GAP
Figure 2
1.3 MAIN PLAYERS OF PAKISTAN POWER SECTOR
Water & Power Development Authority (WAPDA )
Natioanl Electric Power regulatory Authority (NEPRA)
Sind Coal Authority (SCA)
Private Power and Infrastructure Board (PPIB)
Karachi Electric Supply Corporation (KESC)
Geological Survey of Pakistan (GSP)
Pakistan Electric power Company (PEPCO)
Ministry for petroleum and natural resources
Provincial private power cells
Fuel research center
Provincial Inspectorates of mines
Mine Rescue & Training centers
Independent Power Procedures
1.4 OBJECTIVES OF POWER POLICY PAKISTAN
1) To provide sufficient capacity for power generation at least cost, and to avoid capacity
shortfalls
2) To encourage and ensure exploitation of indigenous resources which include
renewable energy resources, human resources, participation of local engineering and
manufacturing capabilities.
3) To ensure that stake holders are looked after in progress
4) To be attuned to safeguard the environment
1.5 SCOPE OF POWER POLICY PAKISTAN
Private sector projects
Public sector projects
Public-Private partnership projects
Projects developed by public sector and then divested
1.6 PROJECT PROCESSING FEATURES
1.6.1 SOLICITED PROPOSALS
Sr. Activity Typical time
1 Submission of prequalification
documents by sponsors
30
2 Evaluation of prequalification
documents
30
3 Approval of PPIB Board &
notification to pre-qualified
bidders
15
4 Issuance of RFP to bidders 15
5 Present minimum functional
specification
120
6 Evaluation of bids, approval of
PPIB board
60
7 Approval of NEPRA and ECC 21
8 8POSTING OF performance
guarantee
10
9 Issuance of Letter Of Support by
PPIB
5
1.6.2 PROCESSING OF RAW SITE PROPOSALS
Figure 3
CHAPTER 2
THE PROJECT NAME, SPECIFICATION
2.1 PROJECT NAME AND SPECIFICATION
PROJECT NAME 157 MW Natural Gas Fired Combined Cycle Power
Project
LOCATION Shekhmando, Quetta
PARENT COMPANY Habibullah Energy Ltd.
MAJOR CONTRACTOR Alstom , Albario
NAME OF POWER PURCHASER WAPDA
DATE OF AWARD OF PROJECT July 31st, 1994
DURATION OF
REHABILITAION/CONTRACTION PERIOD
Approximately 3 years
TOTAL CAPITAL COST OF PROJECT US $155 million
FINANCING MIX (20,80) (Equity, Debt)
APPLICANT SHARE OF EQUITY 50% voting equity
TYPE OF PLANT Natural gas- (High BTU)
EQUAL CONTRIBUTOR El Paso Corporation. Joint venture of HEL and El
Paso
START OF PROJECT COMMERCIAL OPERATIONS: October 1999
2.2 THE PARENT COMPANY STRUCTURE
HEL group was founded by Hafiz Mohammad Habibullah. HEL is a part of Habibullah
Group was established in 1987 as an unlisted public company, formed under companies
Ordinance act. The company’s objective was to develop power projects in the country. In
Pursuance of the Government of Pakistan’s policy to encourage private sector for power
generation, HEL was the first to take initiative for 157 MW Natural Gas Fired Combined
Cycle Power project. - Quetta, Pakistan.
2.3 HABIBULLAH GROUP DIRECTORS
Mr. Saeedullah Khan Paracha
Currently, MD Habibullah Coastal Power Pvt. Ltd.
MD, HEL
Chairman HEL mines
Partner H.M Habibullah Co.
Mr. Hamidullah Khan Paracha
Director, Tandlianwala Sugar mills
Partner, H.M Habibullah Co.
Director, Matiari Sugar Mills
Mr. Tariq Saifullah Paracha
Senior VP Habibullah coastal power Pvt. Company
2.4 QUETTA POWER PROJECT:
In pursuance of the Government of Pakistan’s policy to encourage private sector for
power generation , Immortal Energy ltd. Was the first to take initiative for the
establishment of 157 MW Natural Gas Fired Combined Cycle Power Project-Quetta ,
Balochistan. The initiative for establishing of the power plant was undertaken at the
invitation of the Gov. of Pakistan and in London Investment conference in 2005 where
Federal secretary invited Immortal Energy Group to come forward and establish the
power plant at Quetta, Balochistan in the private sector. This project is located in
Shekhmando, Quetta which is the best and ideal location for a power project. WAPDA’s
grid station is hardly at a distance of 2km.
The plant has excellent thermal efficiency through combined cycle system which
involves major equipment which inter-alia encompasses:
Gas Turbines & accessories
Steam turbine
Waste Heat recovery
Air Cool Condenser
Fuel Gas Compressor
Water Treatment Plan
The implementation agreement, power purchase agreement between HEL and WAPDA
were finalized.
2.5 RESPONSIBILITIES OF DIRECTORS
Responsible for management and supervision of Immortal Energy Ltd. which
operates 157 MW power generation plant at Quetta.
Formulation of policy framework for best interest of company affairs.
Providing guidelines for day-to-day operation of Quetta Power plant.
Resolving day to day major issues pertaining to WAPDA vis-à-vis Quetta power
plant.
Attending and presiding over the Board of Directors meeting in USA or Pakistan.
Providing directives to professional staff in resolving financial and technical issues
with WAPDA and PPIB.
2.6 FUTURE ENDEAVORS: CAPACITY EXPANSION OF
THE EXISTING 157 MW COMBINED CYCLE GAS POWER
PLANT AT QUETTA
HEL intends expanding/duplicating the existing plant capacity by another 157 MW using
the proven design & engineering already used at the existing Plant.
A major portion of the natural gas for the proposed expansion could come from gas fields
of Zarghun and Khust (near Ziarat), which are being developed by Mari Gas Company
Ltd. We would also need additional gas allocation by the Ministry of Petroleum &
Natural Resources.
The Proposed expansion of the Quetta Power Plant would help:
Minimize WAPDA’s’ financial losses considerably by reducing the heavy
transmission losses
Overcome load requirements
Strengthen/stabilize WAPDA’s Grid System in the region
Reduce the voltage fluctuations
Provide electricity in surrounding/adjacent regions
2.7 AFFILIATED COMPANIES HABIBULLAH GROUP
Habibullah Coastal power Private Company
Habibullah Mines Pvt. Ltd.
Tandlianwala Sugar Mills Ltd. HEL
A Power generation companyA Sugar Manufacturing companyA Power Project Development CompanyA Coal Mining Company
Figure 4
CHAPTER 3:
HYDEL POTENTIAL IN BALUCHISTAN
Pakistan’s industrial growth and development depended substantially on the availability
of reliable electric power. About half of the nearly 140.5 billion people (2001 population
estimate) have no access to electricity; this huge population base provided an ideal
opportunity for expansion of electricity generation. Since the 1980s, power supply has
lagged behind demand, resulting in major load shedding of up to 30 per cent of peak
demand. A government-initiated study on power shortages conducted in 1994 highlighted
that an additional generation capacity of about 9,800 MW was needed by year 2020. Of
this additional capacity, 4,600 MW was under construction, or in the early stage of
planning by the government sector while the balance of 5,200 MW was recommended to
be installed by the private sector Pakistan’s power-generating capacity grew from 119
MW at the time of partition from India in 1947 to almost 17,664 MW in 2004. In the total
installed capacity, the share public sector was around 70 per cent and the private sector
30 per cent. The generation, transmission, distribution and retail supply of electricity in
Pakistan was undertaken mainly by two government-controlled public sector utilities:
WAPDA and the Karachi Electric Supply Corporation (KESC). WAPDA supplied power
to all of Pakistan except the metropolitan city of Karachi and some of its surrounding
areas, which were supplied by the KESC.
The private sector included sixteen independent power producers (IPPs) established on
a Build, Own and Operate (BOO) basis, mainly under the private power policy
announced by the Government of Pakistan in 1994.
Figure 5
Figure 6
CHAPTER 4
PROJECT TEAMS, CONTRACTORS AND
SUB CONTRACTORSAlstom power has very vast experience in power generation as EPC contractor. Alstom
has worked in the development of various power generation plants including
rehabilitation, maintenance and installation, These power generation are located in
Pakistan and all over the world. In Pakistan Alstom has been operating in power business
since 1957. Their share in MW installed was 15%.
Albario O&M contractor is the official representative of General Electric USA in
Pakistan. It is engaged in operation and mainteenace.
3.1 ORGANIZATION CHART OF HEL PARENT COMPANY
Chairman
Managing Director
Director Operations
Project Engineer I
Project Engineer II
IIIIII
Director Coordination
3.2 ALSTOM POWER EPC CONTRACTOR
At ALSTOM, we offer a comprehensive capability, possessing the broadest scope of
power generation systems, equipment and services in the industry. Our customers enjoy
the maximum of options plus the most economical, environmentally friendly and
advanced technologies. The services provided them include:
Combined Cycle Plants
Conventional Steam Power Plants
Steam Cycle add-ons
Nuclear Conventional Island
Repowering and Rehabilitation
Electrical & Control Systems
Turbo machines Portfolio
Alstom Structure
ALSTOM's Power Sector is organized in 2 Sectors: Power Systems, and Power Service
3.3 ALSTOM EMPLOYEES BY REGION
Figure 7
3.3 ALBARIO ENFINNERING LTD
It was created in 1964. The Head Office is located in Lahore. It has an experience of over
5 decades in Pakistan’s Energy sector. It has executed projects in the following areas:
Thermal power station
Hydel power Generation
Civil construction
Sponsor/developer
Electro mechanical contracting services
Its Customers are:
WAPDA
PARCO
NRL
OGDC,PPL
SSGC
Pakistan Railways
FGFC FFC
3.4 LIST OF FAMOUS PROJECTS PAKISTAN
Installation 60 MW East Pakistan
Installation 60 MW Chitagong
CM&U 4*25 MW GT WAPDA, Faisalabad
Erection, and installment of 4*40 MW hydro power station at warsak
Supply & Installation of 2*100 MW Hydro Power station at Mangla
Installation 4*33 kv grid stations
3.5 ALBARION AND HABIBULLAH ENERGY LTD.
O&M Subcontractor for GEII managing Operation and maintenance of the 126 MW CC
HEL power plants.
Responsibilities are:
Human Resource Management
Plant Operation
Plant Maintenance
General plant administration
Sponsor/Developer
100 MW wind turbine Power project Balochistan
Summar Gah 28 MW HPP-NWFP LOS
6 MW HPP- Canal Fall in Punjab
CHAPTER 5
PROJECT PLANNING IN BRIEF
PROJECT SCHEDULES
Cost Schedule Tentative USD 155 Million
Financing Pattern 80%Loan, 20 % Equity
Local Sponsor HEL
Equity Composition HEL USD $ 10 Million National
trading Co. USD $ 47 Million LOS by Equity Commitment Letter
Internal Rate Of return 21% guaranteed
Tariff WAPDA will provide high Tariff
CHAPTER 6
MAJOR STAKEHOLDERS & SCORING
MODELS
6.1 BANKS
Muslim Commercial Bank Ltd, Karachi
Muslim Commercial Bank Gari Khata, Hyderabad
Investment Corporation of Pakistan, Karachi
Bank of Scotland, Ireland
Barclays Bank London
6.2 CONTRACTORS
Alstom and Albario as EPC contractors
6.3 GOVERNEMENTAL BODIES
PPIB
WAPDA
6.4 HISTORICAL FINANCIAL RATIOS FOR THE RECENT
YEAR
Current ratio 4.60
Net Profit margins 28X
Return On Assets 65x
Return on equity 79x
6.5 SCORING
Weights assigned
Category Factors
Technical Strength A. Experience in conducting
feasibility study
50%
B. Power project Experience 50%
Financial Strength A. Previous experience 100%
1) Power project financing track
record
2) Credit references
80%
20%
B. Capability 100%
1) Credit Rating
2) Credit references
80%
20%
Total score is like: 0.55*(Category 1 score) + 0.45*(category 2 score)
Total score of category 1 = 0.50*(Score factor A) + 0.50 *(Score Factor B)
Power projects over .75 x MW
Role of applicant Points/project
Initial Partner 12/8
EPC Contractor 14
O & M Contractor 10
6.6 SPECIALIST FIRM FOR CONDUCTING THE
FEASILBLITY STUDY
Lameyer International GmbH is recognized as an independent firm of consultants by
WB, European Banks and Regional Development Banks. It offers a wide variety of
consulting engineers.
It uses software like SAP R/3 for financing, controlling and project management. It has
Re/master program to design the new equipment needed to convert a pure stem power
plant to combined cycle and stimulates performance. It uses PROJECT TIME
SCHEDULING PROGRAMS LIKE PROJECT COST CONTROLLING AND
RESOURCE PLNANNING PROGRAMS. The project management software it uses
gives:
Evaluation sheets
Bill of quantities
Specifications
Site inspection and test schedules
It also uses a PROJECT MANUAL which defines all the procedures and details for
coordination of activities.
CHAPTER 7
CONFLICT & NEGOTIATION ISSUE
For many years investments projects in the province of Balochistan have been subjected
to uncertainties and abnormal conditions. The crisis led by Akbar Bugti over the pipeline
issue made Balochistan an insecure investment option. Therefore, knowing the conditions
(gas pipeline); El Paso was advised to insure its plant and operational equipment by a
firm. There were many issues regarding all this. El Paso insured its plant and other
equipment, hence taking into account the uncontrollable and uncertain conditions in
Balochistan. The uncertainty factor did not only come from the Bugti side, but also the
border and political government crisis prevailing in Quetta. It was a wise decision by El
Paso to make secure all of its assets, plant and equipment. However, the insurance
negotiation and the amount in dollars is a business secret and the information is
confidential. Nothing much information is available about the dollar value of the
insurance and other specifications. The main conflict rose with the Habib Ullah Energy
Ltd., which was resolved after a couple of months and the final decision were hence
taken. El Paso has taken certain decisions in other parts of the world, especially stagnant
world economies. Government where such highly uncertain conditions exist, El Paso has
insured its plants everywhere.
CHAPTER 8
PROJECT SCHEDULING
Figure 8
Figure 9
Figure 10
Figure 11
Figure 12
Figure 13
8.1 PROJECT MANAEBMENT
Training
The project includes Training of operating staff for a certain period and certain foreign
experts will be coming. During the final stage of erection, a practical training will be
given by the instructor for 5 hours.
Engineering
Project Management in Pakistan and civil engineering was also included in the project.
The costs of the civil works including the preparation of site were estimated on the basis
of offers on local conditions. The costs for erection and commissioning as well as
contractor’s risk insurance were included in the project.
The operating assistance during the first years of expatriate specialist assisted the local
staff in operation and maintenance of the plant. During the period of assistance, the
specialist transferred the duty so that the operation takes place effectively.
8.2 PROJECT HUMAN RESOURCE REQUIREMENT
Both h skilled and unskilled man power was needed in the project. Skilled man power
comprised experienced staff. The staff was headed by electrical and mechanical engineers
having 15-20 years experience. Locally recruited staff comprised manager, asst manager,
engineers and unit operators. On-the-job training was provided for about 6 months.
8.3 THREE PHASE PROGRAM
The assistance by experts followed a 3 phase program.
Phase 1 Experts supervised the operating staff and were responsible for operation of
project
Phase 2 Experts transferred responsibility from counterparts.
Phase 3 Local operating staff was advised by experts.
During phase 1, experts wee 100% responsible for performance of the plant. During
phase 2 the warranty linked with contractual responsibility expired.
CHAPTER 9
PROJECT COST ESTIMATION
9.1 FEAAILBILITY OF THE PROJECT
There were many factors that influenced the feasibility of the project. These include:
۞ Interest rates
۞ Maturity of loans
۞ Exchange rates
۞ Taxes and fees
The project cost was determined on the following basis.
PROJECT COST: It included cost of plant, equipment and services for the power
station excluding import fees
TOTAL COST: project cost plus import fees and preproduction cost
IMPORT FEES: IQRA, Surcharge, import license fee
PREPRODUCTION COST: Interest during construction, commitment fees, and
export credit agency premium
Unit rate: one KWH in Rs.
Financing scheme: Equity: 20 % of project cost
Debt: 80% of project cost
Depreciation period: 25 years with salvage value of 25 years
Contraction period: 30 months
Preproduction cost: Interest payable on capital investment which is utilized during the
construction period
The interest and fees on utilized amounts were accumulated and repaid with the loan. The
repatriation, of principles, interest and fees was calculated on semi annual basis.
9.2 PROJECT COST ESTIMATION
A Top down approach was used in the project cost estimation. For some parts of the
project where debt equity structure and other specifications were made. Work Element
costing was also used where cost of each per unit is prescribed. Direct cost for resources
and machinery were charged directly to the project and not subject to over head charges.
The charge for machines was tread as operating cost.
For example:
Parameters like ……………. Were used in cost calculation:
Price
Price Rs. 383
Heating value 5750 BTU/LB
Energy sold 919,800,000 KWH
Equity 20 %
Debt 80%
COST OF PROJECTS:
This was conducted somewhat in a top down fashion. It comprised:
Equity (local) (10%)
Foreign (10%)
20%
WB window 30%
Export credits 38%
Commercial loans 12%
COST OF THE PROJECT FURTHER INCLUDED: (IN 1000 RS)
FOREX 3,022,230
Local portion 625,580
Project cost 3,647,810
Import fees 453,355
Interest and fees during construction 704,455
Total preproduction cost 1,157,790
Total cost 4,805,600
Operating costs:
The se include
۞ Fuel cost
۞ Salaries
۞ Insurance
۞ Supplies, chemicals, disposal
۞ Interest on working capital
۞ Leases and rent
The operating costs include salaries in foreign currency for foreign experts to operate and
supervise the plant mainly in firs t years.
Work element costing
Fuel cost is determined like:
822k130 t/a Rs./t=0.3423 Rs. /KWHr
The salaries for local staff are determined as:
12,750,000 Rs. /a = 0.0139 Rs. /KWH
Insurance:
70,511,000 Rs. /a = 0.0767 Rs. /KWH
Ist year of operations = 18328,000 Rs. /a = 0.0199 Rs/kwh
Second year of operations = 17,042,000 Rs. /a = 0.0186 Rs/kwh
Third year of operation = 9,753,000 Rs. /a = 0.0106 Rs/kwh
CHAPTER 10
PROJECT PC I, PC II, PC III AND PC IV
SPECIFICATIONS
10.1 PC I
The some of the particulars of PC 1 form of the project are:
1 Name Of Project Habibullah Coastal Power Company Quetta power
project
2 Location Quetta, Balochistan
3 Authority Responsible for
a) sponsoring
b) Execution
c)Concerned federal Ministry
Habib Ullah Energy ltd.
PPIB , WAPDA
4 Project Objectives and its relationship with
sectoral objectives Minimize WAPDA’s’ financial losses
considerably by reducing the heavy
transmission losses
Overcome load requirements
Strengthen/stabilize WAPDA’s Grid
System in the region
Reduce the voltage fluctuations
Provide electricity in surrounding/adjacent
regions
To build d and operate a power plant of
suitable size
To reduce critical power shortage during
winter time
5 Description, Justification and technical
parameters
Net electrical output, Price
Energy sold in KWH, Depreciation period,
construction period
6 Capital cost estimates Project cost + import fees and production cost i.e.
4805,600 (in 1000 of Rs.)
7 Annual Operating and maintenance cost after
project completion
These include Fuel cost, salaries, Insurance,
Supplies, disposal, Spares & Maintenance, Interest
on working capital, leases and rents, transport cost :
These re : 0.41 Rs. KWH
8 Financial Plan and mode of Financing Equity (20) (10% Local) (10%Foreign)
WB : 30%
Export Credits: 38%
Commercial loans: 12%
9 Projects Benefits and analysis
a) Financial
b) Social Benefits
c) Employment generation, direct and indirect
d) Environmental Impact
10Management Structure and manpower
requirements including specialized skills during
operation and maintenance stage
The management comprises acting management and
BOD. The structure comprises the head office
management and operating staff at Quetta. The plant
management is responsible for operations and
maintenance. Manpower requirements include:
PRODUCTIOBN STAFF: (Plant Superintendents),
Section manager, Section manager electrical control,
PA to Superintendent)
OPERATING STAFF: (Chemical engineer,
Assistant chemists, Unit operators, Field operator,
FO Boiler plant, FO Water treatment,)
ADMINISTARTION: (Manager, Accountant,
finance and purchase, Clerk, typist, Accountant
Personnel)
11 Additional projects required to maximize
socioeconomic benefits from the project
None
10.2 PC II (SURVEY AND FEASIBILY STUDIES)
Things discussed briefly under PC 2 are:
1 Name by which Feasibility will be conducted Lahmeyer International LI an independent firm of
consultants. It covers a range of advisory, planning
and design services, with core in power generation.
The services comprise surveys, investigation,
feasibility studies, risk assessments, environmental
impact assessment studies etc.
2 Administrative Authorities, responsible for
sponsoring and execution
Habib Ullah Energy ltd. El Paso , Albario, Alstom
EPC contractors
3 Details of feasibility study
a) General description
b) Implementation period
c) year wise estimated cost
d) Man power requirements
e) Financial Plan
The implementation period was 30 months,
The aim of feasibility study was to conduct costs and
factors both strategic and financial which occurred.
The factors involved interest rates, cost of plant,
FOREX rates, taxes, insurance fees, total cost, unit
rates import fees, preproduction costs, export agency
credit premium, surcharge, IQRA , mode of
financing , (already discussed), manpower
requirements, (already discussed) and investments
costs. The period of contract was approximately 3
years. The sources of financing are already
discussed. (20 % Equity, 30 % WB, Export credits
38%, 12% commercial loans). Local as well as
foreign personnel are also discussed in the project.
4 Expected outcome of feasibility study The expected outcome of the feasibility study was
the estimation of cost and schedules, Personal
required and other specifications.
10.3 PC III (ANNUAL TARGETS AND PROJECT
REPORTING) (1ST JULY OF EACH YEAR)
Name of project Habibullah Coastal Power Company Quetta
power project
Approved Cost
Expenditure unto end
PSDP allocations
FEC
LEC
1 USD = 18.596
Operating cost in years of operations
Year 1----- 457,469
Year 2------456,183
Year 3------448,894
Year 4------439,141
Year 5-10 ------439141
11-25------------439141
The cash flow analysis shows that discounted cash
flows for 10 years.
10.4 PC IV (PROJECT COMPLETION REPORT)
Name of Project Habibullah Coastal Power Company Quetta
power project
Implementation period as per PC 1 Date of project award July 31 1994
Date of financial closing April 4 1996
Duration of contraction 3 years
Commercial operation date of each unit 1999
Actual
Capital cost Planned
Actual
USD 155 million
USD 180 ( Changes due to FOREX, interest
payments, amortizations, unit costs variable as well
as fixed)
Financial results based on actual cost The IRR was 21 %.
Actual Time 6 years
Planned time 4 years
Most of the things of PC I, PC II, III and IV are discussed in detail in the entire report in
form of chapters. The last chapter provides only the summarized version of the
components of PC forms in Pakistan. The rest of the components of PC 1, PC 2, PC 3 and
PC 4 pro forma are discussed in quite a detail in the project report. The last chapter world
Bank comment and lessons learned provide a feedback on energy sector investments in
Pakistan.
CHAPTER 11
WORLD BANK COMMENT ON
PAKISTAN ENERGY SECTOR:
Beginning in 1987, Pakistan requested assistance from the World Bank to increase
private sector participation in the energy sector. An initial framework of incentives to
attract private investment in the energy sector was put in place in 1988 which addressed
the following constraints:
۞ • The absence of a comprehensive policy framework concerning incentives, fiscal
treatment, repatriation of profits and capital, availability of foreign exchange, and
pricing;
۞ • The lack of long term financing for projects with long gestation periods and
economic life; and
۞ • The inadequacy of the institutional arrangements for the review, negotiation and
approval of private sector projects.
In July 1992, the Government of Pakistan (GOP) adopted a Strategic Plan for power
sector privatization. Under this plan, the Water and Power Development Authority
(WAPDA), the main electric utility in the country, would be unbundled into separate
generation, transmission and dispatch, and distribution companies and gradually
privatized. The private sector would be invited to construct and operate new thermal
generation plants, and an independent regulator would be established.
In support of this policy, the World Bank approved the US$150 million Private Sector
Energy Development Project (PSEDP 1) in June 1988. Its objectives were to:
(i) Assist Pakistan in mobilizing, from the private sector, the resources required to meet
the anticipated deficit in power supply; (ii) establish incentives to encourage private
sector participation; and (iii) establish an institutional framework required to facilitate
private sector transactions in energy on a sustainable basis.
The Second Private Sector Energy Development Project (PSEDP II) was approved in
November 1994 for US$250 million. It replenished the Long Term Credit Fund
(originally known as the Private Sector Energy
Development Fund) established under the first project with the objective of continuing to
(i) assist the Government in mobilizing additional private sector resources; and (ii) build
on the institutional and policy framework established to facilitate private sector
REFERENCES
Stephen P. Robbins, “Organizational Behavior”, 11th Edition, Prentice Hall of India, 2005 Jack Meredith, Samuel J. Mantel,” Project Management”, A managerial Approach, 5th Edition, John Wiley & Sons IncStatement of Qualifications, HEL: Volume 1 & 2 Julia M. Fraser, “Lessons Form the Independent Power Sector Experience in Pakistan”, Energy and Mining Sector Board discussion paper, World Bank Group