Pakistan Bin Qasim Thermal Power Station Unit 6 Project
Pakistan Bin Qasim Thermal Power Station Unit 6 Project
Pakistan Bin Qasim Thermal Power Station Unit 6 Project
Project site
Project Site: 50-km east of the city of Site Photo: Bin Qasim Thermal Power
Karachi Station
. Background
1.1.
At the beginning of the 1990s, maximum load demand for power in Karachi and
surrounding areas, which are served by Karachi Electric Supply Corporation Ltd.
(KESC), was increasing year on year, and in fiscal 1989/1990 (1989/7~1990/6) and
fiscal 1990/1991 (1990/7~1991/6) installed generation capacity fell short of peak
demand. The increase rate for maximum load demand was predicted to exceed 9% in
and after fiscal 1991/1992 as the result of sweeping increases in the demand for power
for household and industrial uses. Electrification of agricultural villages and the
dissemination of domestic electrical appliances was projected to yield sizable
increases in household demand for power. Whilst the easing of regulations relating to
trading policies, the abolition of foreign exchange controls and policies to promote
foreign investment, in combination with the activation of private investment, was
forecast to have a similar effect on power demand for industrial uses.
In contrast, from a supply perspective, despite the fact that a third generating unit was
scheduled to become operational at Bin Qasim Thermal Power Station (BQTPS) in
fiscal 1992/1993, projected suspension of operations at the seriously deteriorated West
Wharf thermal power plant and the Karachi nuclear power plant, which supplies
KESC catchment areas, and the leveling off of installed generation capacity, was
expected to result in the reemergence of supply shortages in and after fiscal
1993/1994.
In order to handle these additional load requirements and the shortfalls in supply, the
construction of a thermal power station powered by imported heavy oil was urgently
necessary.
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1.2. Objectives
In order to resolve the projected shortfalls in supply within KESC jurisdictional areas
in and after fiscal 1993/1994, this project was to add a sixth generating unit (210MW)
to the facilities at BQTPS, located approximately 50km to the east of Karachi, by way
of plant expansion. The project also involved the provision of high voltage
transmission lines (220KV × 2, 35km) as part of the planned transmission circuit
system in order to strengthen the supply system within the catchment area.
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oil/gas-fired thermal power stations for the short-term relief of supply restrictions; iii)
secure supply via the construction of large-scale thermal power stations that are not
affected by seasonal changes in the weather; iv) promotion of rural electrification, and
v) utilization of the private sector. Development target (1), and the specific
development policies i), ii) and iii), were applicable to this project.
Moreover, in recent years, Pakistan has been promoting the development of gas fields
and the construction of gas pipelines against a background of soaring heavy oil import
prices and environmental considerations, and is proceeding with the conversion to
gas-fuelled power stations. Imported heavy oil was to be employed at BQTPS in order
to fulfil short-term demand requirements, however, joint heavy oil/gas boilers were
installed with a view to the future developmental promotion of gas power in Pakistan
and a system was arranged in conformity with such changes in the external
environment. Accordingly, the construction plan for this power station is considered
relevant.
2.2. Efficiency
Since the executing agency has not prepared any relevant data, there are no accurate
reports available. However, as far as the portion covered by the ODA loan is
concerned, a 2-year extension was made to the Phase I disbursement period, which is
considered to have delayed the overall construction period. According to the executing
agency, these delays were primarily caused by the general strikes in Karachi and
delays in procuring imported materials and equipment contingent upon changes in the
customs procedures system, among other things. Moreover, although the disbursed
amount was less than the approved loan amount, it has not been possible to obtain
reports on overall project costs from the executing agency.
2.3. Effectiveness
(2.3.1.) Stable Power Supply
Table 1 is a comparison of the main operating results of the No. 6 generating unit,
which was constructed under this project, against the levels planned at the time of
appraisal. The data shows that the project has achieved results in excess of planned
levels. As Table 2 shows, the operating status of the newest No. 6 generating unit is
favorable in terms of its high maximum output, thermal efficiency and utilization
factor, and low auxiliary factor, even when compared with the other units installed at
BQTPS.
On the other hand, however, although actual maximum output, total power
generation and the plant utilization factor have all exceeded planned levels,
over-loading and the fact that periodic inspections are not being performed means
that there is a risk of early deterioration of the facilities, and it will be necessary to
bear these factors in mind in the future.
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Table 1 Comparison of Planned / Actual Operating Conditions of Unit 6
Figures in parenthesis are achievement ratios against planned levels
1997-98 1998-99 1999-2000
Maximum Output Planned level 210 210 210
(MW) Actual level 219 (104%) 213 (101%) 210 (100%)
Total Electricity Planned level 981,194 1,174,210 1,174,210
Generation (MWh) Actual level 931,155 (95%) 1,443,015 (123%) 1,467,960 (125%)
Plant Utilization Planned level 63.83% 63.83% 63.83%
Factor* (%) Actual level 60.57% (95%) 73.63% (115%) 75.13% (118%)
*
Plant utilization factor = annual electricity generation / (rated output × 365 days × 24 hours)
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Independent Power Producers (IPP), and there is a year-on-year increasing trend in
such external power purchasing (refer to Figure 2). Power shortages in the KESC
catchment area are chronic even in spite of such power importing and planned
outages (‘load-shedding’) are necessary, particularly during the summer months
(refer to Table 3).
Against these circumstances, the No. 6 generating unit, which was additionally
installed at BQTPS under this project, (GWh)
has continued to operate stably as a 12,000
base load generator, and in the two 10,000 Power purchased from
8,000 WAPDA / IPP
year period from July 1998 through
June 2000, was supplying 13.6% of 6,000 Total electricity
generated in KESC
the total supply within the KESC 4,000 catchment areas
2,000 Electricity generated
catchment area. It is thus
by Bin Qasim Unit 6
0
contributing to improving the tight 94-95 95-96 96-97 97-98 98-99 99-00
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Table 4 Comparison of Planned / Actual FIRR Calculation Bases
Electricity Unit Price Fuel Price per System Loss
generation (GWh) (Rp/kWh) kWh (Rp/kWh) Ratio (%)
At appraisal① 1,174.2 1.89 0.373 21.0
Actual level② 1443.0~1468.0 2.33~2.56 1.16~1.85 31.5%~38.6
Deviation②÷① 1.23~1.25 fold 1.233~1.35 fold 3.113~4.96 fold 1.503~1.84 fold
*
All prices are fixed-price indicators for fiscal 1997
2.4. Impact
(2.4.1.) Impact on Society
Planned load shedding in the KESC catchment area extends to general households
and the industrial sector, and is considered to have had a considerable effect on
industries and public welfare in metropolitan Karachi. The maximum power supply
cut value of approximately 102.0GWh recorded in fiscal 1998/1999, was
substantially reduced in fiscal 1999/2000 to 7.3GWh (refer to Table 3). This was the
result of increases made to the capacity of transmission lines linking the WAPDA
grid system and the KESC grid system, and to power supplies from IPP. The
installation of the No. 6 generating unit at BQTPS is also considered to have made a
proportionate contribution to this improvement.
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2.5. Sustainability
(2.5.1.) Operation and Management System
In Pakistan, two public corporations, WAPDA and KESC, which are supervised by
the Ministry of Water and Power play a central role in the supply of electricity.
KESC is a government-linked company involved in power generation, transmission
and distribution of electricity in the greater Karachi metropolitan area (part of the
state of Baluchistan), and 63% of its stock is owned by the government of Pakistan.
As of the end of June 1999, KESC had 12,499 employees.
Operation and maintenance work is carried out by BQTPS under the supervision of
KESC. The power plant currently employs 862 workers, 122 of whom are
administrators, whilst the remaining 740 are employed as operators. On the other
hand, however, KESC head office originally approved a staff of 1,105, which means
that 243 posts are currently vacant. This is because KESC is proceeding with
rationalization of its organization under the guidance of the Asian Development
Bank (ADB), and both the recruitment of new staff and the replacement of retiring
employees have been forbidden for the last ten years, including at BQTPS. As of the
end of June 1993, the number of consumers per employee, which is one of the
indicators of productivity, stood at 85 for the entire KESC. By the end of June 1999,
this figure had risen to 116, evidencing a considerable improvement in productivity.
KESC is planning to adopt various policies including the promotion of outsourcing
for welding / metal processing operations, and is intending to proceed with
reductions in staff numbers and personnel expenses.
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Table 5 Results of Overhauls (O/H) of Units 1 and 2
Rated Maximum Output (MW) Benefits* Thermal Efficiency (%)
Cost of O/H
Output (million
Before O/H After O/H (million Rs) Before O/H After O/H
(MW) Rs/month)
Unit 1 210 80 190 81.48 59.43 29.5 36.20
Unit 2 210 140 200 65.49 28.38 34.75 37.50
*
Total monthly revenue from sales of power operating at a load factor of 80%
Source: BQTPS data
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Table 7 KESC Balance Sheet
(Unit: million Rupees)
1993-1994 1994-1995 1995-1996 1996-1997 1997-1998 1998-1999
Current assets 6,746.70 8,845.58 11,623.88 12,938.91 16,364.87 19,466.76
Fixed assets 26,131.08 31,908.07 40,410.92 49,133.81 50,226.58 49,751.03
Assets
The receivables turnover period has long been a problem for KESC and has been
deteriorating year on year. In the last five years, it has become 5~7 months. Looking
at a breakdown of the receivables in fiscal 1998/1999, receivables from federations,
the state government and the state-owned enterprises under its jurisdiction accounted
for 16.6% of the total. In addition, since KESC’s profit potential and liquidity are
low it is unable to secure sufficient internal reserves for investment in development,
thus its financial costs remains high because it is dependent on borrowing, which is
in turn pushing up its liabilities.
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Furthermore, the transmission and distribution loss ratio from the KESC grid system,
which stood at 19.77% in fiscal 1988/1989, had risen to 38.84% by fiscal 1998/1999
and is extremely high. The primary reason for this is the high incidence of power
theft (illegal connections to transmission lines and rigged meters) on the distribution
side. According to the predictions of
40
38.64
the executing agency, power theft
34.62
accounts for 20~25% of transmitted 31.37 31.2
31.53
30
electricity. Loss of power due to 26.04
27.3
27.47
23.8
power theft has a direct impact on
20.84
corporate profits and is an extremely 20 19.77
serious problem. KESC has been
covering distribution lines in a pilot 10
89 90 91 92 93 94 95 96 97 98 99
area and has implemented measures Figure 3 Transmission and Distribution
to crack down on power theft across Loss Factor of KESC System
the whole of its catchment area,
however, such steps have failed to produce any tangible results at this time.
Increased purchases of power from WAPDA and the launch of operations at BQTPS
enabled KESC to put a temporary stop to load shedding in its catchment areas,
however, in the months from July through November 2000, it again became
necessary to carry out rotating blackouts amounting to 82,148MWh. This is due to
the fact that KESC, which has a tendency to fall into arrears in its payments to
Pakistan Petroleum Ltd. (PPL), is now required to pay for its heavy oil in advance or
on the day of purchase. This has caused its capital turnover situation to deteriorate
thereby preventing it from being able to make sufficient purchases of heavy oil.
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Table 9 Bin Qasim Unit Fuel Costs (Paisa/kWh)
1996-1997 1997-1998 1998-1999 1999-2000
Gas - - 1.06 1.31
Light oil 1.41 1.52 2.73 3.13
Heavy oil (Bunker C) 1.72 1.69 1.35 2.06
Mean fuel costs 1.41 1.52 1.35 2.04
*
Fuel costs are averaged for BQTPS Units 1~6
Source: BQTPS data
3. Lessons Learned
None
Transmission lines
(a) Zone: BQTPS ~ Korangi West Grid Same as left
Station
(b) No. of lines: 2 Same as left
(c) Length: 30-km 35-km
(d) Voltage: 220kV Same as left
Grid station
(a) Transformer capacity: 250MVA Same as left
(b) Switchgear SF6/gas-insulation type Same as left
220kV
2. Implementation Power station: January 1994 ~ July 1996 Power station: February 1994 ~ April 1998
schedule (31 months) (51 months)
Transmission lines: June 1994 ~ April 1996 Transmission lines: May 1994 ~ September
(24 months) 1998 (53 months)
3. Project cost
Foreign currency ¥24.221 billion N/A
Local currency Rp 3.7841 million N/A
Total ¥38.260 billion N/A
ODA loan ¥26.166 billion ¥25.089 billion
portion
Exchange rate Rp. 1 = ¥3.71 (February 1994) N/A
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