Many engineers wonder why we (government and generating companies) do not use locally made power plants though local industry can produce machinery and equipment for small hydro power plants. Yes, local firms lack the ability to make big power plants on turnkey or EPC (engineering, procurement and construction) basis, but why is the country forced to rely on expensive foreign contracts even in small power stations.
The point was raised by two WAPDA engineers, who would not let us mention their names here. Apart from the present and past governments, the blame is also shared by gencos, they said. The government also faulted in another matter. It preferred importing big thermal plants and their parts/ components. As a result, local engineering firms could not acquire the know how to construct large power plants – thermal or hydro – on their own. 1994 Power Policy focused on thermal power and neglected hydro power.
1995 Hydro Power Policy and power policies of 1998 and 2002 did give local firms some incentives by way of tax concessions etc, to import hydro power plants machinery and equipment but no incentives were given for local manufacturing. In the meantime, all contracts for hydro projects by WAPDA and independent power producers were given to foreign contractors on EPC basis. According to the two senior engineers, the 2002 Power Policy also aimed at developing power projects able to generate at least 2,000 MW in joint ventures with foreign companies.
This should have helped local industry to assimilate requisite technology. But it did not yield expected results and local engineering industry failed to avail the opportunity on a large scale. Local units like Heavy Mechanical Complex (HMC) Taxilla, Karachi Shipyard and Engineering Works, Descon and Heavy Electrical Complex also at Taxilla are able to make hydro mechanical systems (gates, cranes, penstocks, inlet valves, etc), and hydro electro mechanical equipment (turbines, generators, transformers etc) and many other parts and equipments. Quite a few turbine runners, the most critical component, have been produced locally for replacing imported ones in mini and small power stations in Azad Kashmir (Kundal Shahi) and in Khyber (Dargai and Kurram Garhi). Some have also installed small hydro power plants.
HMC installed 40 turbo generators at 23 mini hydro stations in Gilgit Baltistan region, jointly with Switzerland’s Escher Wyss and UK’s Biwater. Local construction companies like Habib Rafiq and Al-Tariq Constructors can also construct small and medium hydro power plants. Descon mostly focuses on project and site management, installing and commissioning plants. NESPAK does feasibility studies, project designing, management and overseeing construction of hydro power projects. Government’s plan to strengthen HMC (cost Rs 21.54 billion) is under implementation presently.
The plan will enable HMC to develop power plants (hydro power) keeping in view projections made in National Energy Security Plan 2005-2030. Engineering Review was told that an important part of strategy is to get HMC to make small hydro projects on turnkey basis. 16 MW Naltar-III hydro project (cost Rs 1.37 b) would be constructed in Gilgit Baltistan. HMC and its consultant, Nespak, have already begun working at the site. Foreign consultants have pointed out hundreds of hydro power schemes with generation capacity of 5-50 MW, technically and economically feasible.
Nonetheless, there is still a need for an effective institutional and regulatory frame work to boost indigenization of production of machinery and equipment for hydro power generation. Starting with small hydro plants, the right environment will enable local engineering industry to do power projects on EPC basis. This would lead to import substitution, cut capital costs, and reduce power generation costs.
