Like any other major project, the on-going refurbishing and upgrading of Mangla Hydropower Station, being undertaken at a total project cost of over $483 million, has run into inordinate delays though, apparently, financing is not a constraint in this case.
Like any other major project, the on-going refurbishing and upgrading of Mangla Hydropower Station, being undertaken at a total project cost of over $483 million, has run into inordinate delays though, apparently, financing is not a constraint in this case. First phase of project implementation is financed by the United States Agency for International Development (USAID).
The project is a major component of the WAPDA’s comprehensive plan of adding least-cost hydropower generation capacity to overcome shortage of electricity and maximize the ratio of hydropower in national grid. The fast-track objective is to be achieved by optimizing the existing operations and maintenance of hydropower stations through carrying out major renovation, upgrading and modernization based on international standards of safety and performance. Mangla Dam, the multi-purpose project, is located on River Jhelum in Azad Jammu and Kashmir. The project on completion will not only restore Mangla power station’s designed original power generation capacity of 1,000-MW, it will also result in increasing the installed capacity of power station to 1,310-MW, effectively utilizing the improved energy potential attained on recently completed Mangla Dam Raising project. Completed at a cost of $1 billion, the Dam Raising project will provide additional water storage of 2.88 million acre-feet (MAF), and availability of increase in water-head by 40 ft.
Implementation of the project will ensure optimization of reliable operations of its all ten generating units, each of 100-MW capacity, constructed from 1967 through 1994 in four stages. Mangla power plant has been operating largely trouble-free but the quality and reliability of the original electro-mechanical equipment has deteriorated due to ageing, and efficiency reduced from the designed values and parameters of the respective equipment installed. Resultantly, the power plants’ total operating capability has derated to less than 980-MW. A joint venture of foreign and Pakistani consultants has prepared the design & engineering of the refurbishment project, related tender documents, and strategy for phase-wise implementation covering all aspects of project, including technological, economic and ecological. Rehabilitation and upgrading will improve the reliability and availability of this power station for the next 40 years, besides providing safe, reliable and cost-effective energy generation.
But, the completion of this project, which will generate additional 1,632 GWh annually, within the stipulated timeline and approved cost, is of paramount importance. Nonetheless, this is not likely to be achieved, given the present conditions. While the detailed feasibility study was completed in December 2011, the project could only be approved by the ECNEC after two years, on December 31, 2013. The project is co-financed by the USAID, which has signed with WAPDA an agreement in August 2013 to give $150 million grant for the project. The first tranche of the grant amounting to $72 million was committed, and implementation letter signed, on March 6, 2014. However, so far only $13 million have been disbursed by the USAID including payment for the feasibility report.
The remaining foreign currency amount of $213 million of project cost has to be arranged from other sources. WAPDA plans to seek two loans, one of $102 million to finance second phase of the project, and the other of $111 million to finance the final phase.
Japan has already shown interest to provide JICA (Japan International Cooperation Agency) funding for second phase that relates to upgrading of the four units installed by the Japanese companies. Balance project cost, primarily in local currency, is envisaged to be financed by WAPDA through its own resources. The project was scheduled to commence in early 2014, and implemented in different phases spanning over a period of ten years’ time, achieving full commissioning sometime in 2024. Nonetheless, implementation has already been delayed. The different phases of project implementation covered refurbishment of various power generating units, with a view that minimum units are shut down at one time, and thus, least power generation is lost during project implementation stage.
In the first phase, the works to be completed include Package-I for the supply, installation and refurbishment of Units 5 & 6 (turbine, generator, governor, excitation system etc.) increasing generating capacity from existing 80-MW to 135-MW for Unit 5 and 100-MW to 135-MW for Unit 6.
Package-II covers for refurbishment and upgrade of powerhouse crane, Package-III for supply of 169-MVA power transformers for eight units, and Package-IV for supply, installation and refurbishment of powerhouse’s turbine inlet valves for all ten units. The remaining packages are Package-V for supply & installation of mechanical equipment & balance of plant and construction of civil works, and Package-VI for procurement and installation of plant control & instrumentation system, switch-yard and control automation & protection equipment. Under the second phase of the program, refurbishment of Units 1-4 is to be undertaken, while refurbishment of Units 7 & 8 is planned under the third and final phase.
First phase of the project is to be completed in five years. Orders for Package-II (powerhouse crane), Package-III (power transformers), and for Package-IV (inlet valves, only for units 1-4) have been finalized during January-June 2015.
However, order for the most critical and long lead-time Package-I has been delayed. Bids for Package-I were opened on June 30, 2014, which were received from prequalified renowned global key players in hydropower technology. But no decision was taken, and the tender was cancelled in December 2014, in spite of strong reservations by some bidders and that of the Transparency International Pakistan. Tender was thus re-invited by WAPDA on June 5, 2015, but last date of receiving bids was extended a number of times. Technical bids having been opened on September 17, 2015, evaluation was finalized recently, and commercial bids have been opened on December 3, 2015. Clearly, one year has been lost.
Ironically, scope of tender has been revised combining Package-I (refurbishment of Units 5 & 6) and Package-VII (refurbishment of Units 1 to 4) that was part of second phase of the project, which has not been launched as yet. It is pertinent to mention that the USAID financing has been made available only for the first phase of the project, whereas funds for Units 1-4 are yet to be committed by JICA. This development, which is not supported by the USAID, is likely to cause further delay in decision-making by the WAPDA. On the other hand, the USAID funding is available for utilization until 2017, and the USAID would have periodic monitoring of project activities to be on schedule and sustainable after project completion. Also, undertaking the refurbishment of additional four units in the first phase would not only be against the strategy adopted earlier by WAPDA, and approved by the government, it would also result in significant power generation loss to national grid continuously for a long time, besides other technical and commercial issues.
The writers is Chairman of Institution of Engineers, Pakistan
