9 ستمبر، 2014

$34bn Chinese package for Pakistan is FDI, not loan: Khawaja Asif

 

by APP

ISLAMABAD: Minister for Water and Power Khawaja Muhammad Asif said on Tuesday that the $34 billion Chinese package for Pakistan was not a loan, but it was foreign direct investment (FDI).

"The investment will be made through different Chinese banks. It will not be our liability rather it will be theirs," said the minister addressing a press conference in response to different issues raised by Pakistan Tehreek-i-Insaf (PTI) Chairman Imran Khan.

This was a technical issue and Imran Khan should consult his aides before issuing any wrong statements at his sit-in, he added.

With regard to interest rate of Chinese investment which was also mentioned wrongly by Imran Khan, he elaborated that the normal rate was 2 to 4 per cent and added that loans would be provided to Chinese companies by Chinese banks.

"There is a difference between the instant investment from China and the assistance provided by the Asian Development Bank (ADB) and World Bank. The latter are concessional loans which are given only to the government against Direct Sovereign Guarantees to the lenders by the Ministry of Finance while most of the Chinese loans are given to the private sector companies for setting up power plants as Independent Power Producers (IPPs)," Kh Asif said.

He said there would be a proper bidding process for award of projects to Chinese companies. After winning the bidding, the companies would approach Chinese banks for capital requirements.

Explaining further, the minister said the government had no intention to amending the PPRA Rules, 2004 with respect to awarding projects to Chinese companies without bidding.

He said the coal proposed to be used for the projects would be imported from different countries but not from China. For the time being, Pakistani coal could not be used to meet the immediate energy demands of the country since the infrastructure development of coal mining for use in power plants would take a few years, he added. He said the coal to be mined from Thar would be utilized by the companies for power generation under mine-mouth project agreements.

He said the projects being installed in coastal areas would be run through imported coal. The procurement, he said, would be made by the IPPs themselves.

Khawaja Muhammad Asif while explaining another point raised by Imran Khan, said the $ 34 billion investment was not a small amount and China had taken a decision in this regard after reviewing all aspects.

He said the cost allowed by National Electric Power Regulatory Authority (NEPRA) for standard super critical technology based 660 MW unit was $ 1.35 million/MW for full Chinese machinery and $ 1.45 million per MW where European boilers would be used.

With regard to $ 0.55 price per MW for coal-based power plant in India, he said all machinery and equipment were made locally there, besides lenders and equity investors were also local. Most importantly due to local investors and lenders, international environmental standards were greatly compromised there, he added.

Khawaja Asif said tariff was determined upfront by NEPRA without any discrimination according to the source and mode of financing.

It was wrong to suggest that the price was fixed by the government, he said and added that the price was fixed by the independent regulator after due process of public advertisement and public hearing and carrying out financial and technical due diligence under the 1997 Act.

Regarding GDP growth rate issue raised by Imran Khan, he said the correct figure for fiscal year 2013-14 was 4.1 per cent, up from 3.7 per cent in fiscal year 2012-13. The International Monetary Fund (IMF) had also revised upwards its growth estimates from 3.3 to 4.1 per cent for 2013-14 in its latest press statement available at their website, he added.

He said Pakistan intended to generate 10,400 MW power through Chinese investment and from the $ 34 billion package, projects for railways and road infrastructure improvement would also be initiated.

Replying to a question, he said Imran Khan had paid his two electricity bills of Rs 30,000 (Rs 17,000 and 13,000).

He said besides improvement in power generation, efforts were being made for better transmission system as the current system, having capacity of around 16200 MW, was unable to bear extra power load.

The minister also rejected the allegation of Imran Khan with regard to obtaining of $ 49 billion loan, saying "this allegation is beyond our understanding."

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