Académique Documents
Professionnel Documents
Culture Documents
Documentof
The World Bank
FOR OFFICIAL USE ONLY
ReportNo. 8006-PAK
Public Disclosure Authorized
PAKISTAN
TIisdocument has a restricted distribution and may be used by recipients only in the performance of
their official duties. Its contents may not otherwise be disclosed without World Bank authorization.
CURRENCYEOUIVA=NT
!AKISAN
TRANSNISSIONEXTENSIONANDREINFORCEMENT
PROJECT
LOANANDPROJECT SUMMARY
Project linancingPlan
(US$ Million)
Disbursements
EstimatedDisbursementSchedule
P.^lSTA^N
STAF ARISALU
Table of Contents
Pase No.
I. ENERGY SECTOR................................................. 1
A. Introduction........................................... 1
B. SectoralSetting ..................................... 2
C. Developmentsin the Sector, FY79-FY88.................. 3
D. Implementationof LES: Progressunder ESL I
and the Program for ESL II........................... 3
E. Bank Group's Role in the Energy Sector and
E.xperiencewith Past Lending......................... 8
II. BORROVER......................................................9
V. ECONOMICJUSTIFICATION
.............
............................ 29
I. ENERGY SECTOR
A. Introduction
B. Sectoralsetting
1.12 Under ESL I, two studul. were completed on issues relating to the coal
subsector. The first identified the main operational constraints impeding the
developmentof coal and outlined a comprehensiveprogram to assess the reserves at
Lakhra and Sonda Thatta. The assessmentof PMDC's lease area at Lakhra was completed
in 1986 and proven reserves sufficient to produce 4 million tons annually were
identified. The second study outlined a strategyfor restructuringPMDC to promote
the more efficient operationof mines in the public sector, and provided a basis for
reviewing the role of the public sector in coal mining. The recommendationsof this
study would be reviewedunder ESL II with the view to separatingPMDC's coal and salt
mining activities and establishinga Mineral DevelopmentBoard. As a condition of
effectivenessof ESL II, GOP would also be required to approve, in principle, the
developmentof the proven reservesat Lakhra througha joint venture between PMDC and
PS. Finally,GOP has agreed to completea study which would review the institutional
arrangementsfor grantingcoal concessionsand the existingfiscal incentiveframework
for investmentsin coal developmentwith a view to encouraginginvestmentsby PS.
1.17 The consumer price of gas, which until 1981 was maintained at low levels
relative to that of its stbstitutes,has since been increased six times, averaging
about 23X annually in nominal terms. With the introductionof a 331 increasein the
consumerprice of gas to households,effectiveDecember1, 1988, the weightedaverage
consumerprice of gas is now slightlyhigher than the border price of fuel oil
(Rs 41.6/MCF compared to Rs 40.7/MCF), which is well above the target of 661
originallyagreed to under SAL I, and reaffirmedunder ESL I. Despite this progress,
distortions persist in the structure of the consumer price of gas. As these
distortionsare resulting in the uneconomicuse of gas, GOP has agreed under ESL II
to: (a) maintain the consumerprice of gas to industrialand commercialsectors et
full parity with the domesticprice of fuel oil; (b) increase the price of gas to:
(i) the power subsector to reach full parity with the domesticprice of fuel oil by
June 30, 1994, with appropriatediscountsfor the power subsector'sinvestmentin gas
transmission;and (ii) householdsto reachparity with the border price of fuel by June
30, 1993; (c) assess the impact of higher gas prices on the ex-factoryfertilizerprice
and identifyinvestmentsin retrofittingand substitutionthat would allow the industry
to absorbhigher gas prices; and (d) undertakea study to assoss the potentialfor peak
shaving and establishing a tariff structure which would promote operational and
allocativeefficiency.
1.19 In 1981, GOP adopted the policy of passing on the higher cost of Retroleum
groductsto fival consumers. This policy, and the fact that domestic retail prices
were reduced only marginallyin responseto the decline in the internati--.alprice of
oil has enabled the petroleum subsector to become th. principal contributor to the
nationalbudget. The weightedaverage retail price in June 1988 was about 170l of the
weightedaverageborder price. The Bank supportsGOP's pricing policy, except for the
fact that domestic prices of industrialfuels should be maintained at parity with
border prices to avoid any adverse impact on the competitivenessof the Pakistani
economy. Therefore,with the objectivesof mobilizingresourcesand preservingthe
competitivenessof industry, under ESL II, GOP has agreed to maintain: (a) the
domesticprices for higher value products,such as gasoline,and naphtha,above border
prices to mobilize resources,and adjust them in line with any movement in border
prices; and (b) the domesticprices of fuel oil, diesel, and kerosene at parity with
averageborder prices plus inland handling charges.
1.20 Unlike electricity,gas and oil, the price of coal is not regulatedby GOP,
but determinedby market forces. On a price basis alone, coal is competitivewith
fuel oil (and also with wood and charcoal). Accordingly,no action on coal pricing
policy is being sougks under ESL II.
1.23 GOP has also reviewedwi4.ththe Bank, the implicationsof WAPDA taking over
the generationand high voltage facilitiesof KESC and restrictingthe activitiesof
the latter to the bulk purchaseof power from WAPDA for distributionin the Karachi
area. The Bank has ascertainedthat in order for this plan to be realized,a financial
restructuringprogram for KESC would have to be implemented,given its precarious
financialsituation. Presently,KESC is not in a positionto mobilizethe large amount
of resources required to rehabilitateits distributionsystem, where losses are in
excess of 30X of gross generationand the quality of service is poor and eroding. In
order to address these problems, under ESL II, GOP would develop a financial and
organizationalrestructuringplan for KESC.
1.24 In the oil and gas subsector,as OGDC was expectedto assume an expandedrole
in exploration and development during the Sixth Plan, GOP agreed under ESL I to
strengthen its managerial capabilitiesand move towards financial self-refinance.
Accordingly,the corporation'sinvestmentprogram for FY86-88 was rationalizedand,
more recently, a decisionwas made to remove OGDC from the budget and reorient its
operationsalong commerciallines. As this decisionwould require strengtheningthe
Cori ration's financial capabilities,GOP has agreed under ESL II to implement a
financialrestructuringplan for OGDC, increasethe wellheadprice of gas to OGDC to
enable the Corporationto achieve agreed internalcash generationtargets and, as an
interimmeasure,provide in the form of loans, resourcesrequiredfor OGDC's investment
program.
E. Bank GranD's Role in the Energj Sector and ESperience with Past Lending
1.27 The Bank Group's involvement in Pakistan's energy sector started in 1955,
with a loan to KESC for the construction of a thermal power station. Since then, it
has assisted in the implementation of projects in all energy subsectors. Prior to
1985, the Bank Group had made 16 loans/credits to Pakistan for energy projects. In
the power subsector, the Bank had participateC in the Indus Basin Development Frojects,
and provided a series of four credits/loans to KESC and three to WAPDA. In the
petroleum subsector, the Bank's involvement included five loans to Sui Northern Gas
Pipeline Ltd. (SNG:L)for the expansion of the infrastructure for the transmission and
distribution of gas, three to OGDCfor exploration and development of oil and gas and
one to the National Refineries Ltd. (NRL) for improving its energy efficiency. All
of these loans/credits have been completed, except for SNGPLV (Loan 2324-PAK) and the
Petroleum Exploration Promotion Project (Loan 2351-PAK), both of which are being
implemented satisfactorily despite an initial delay in startup.
1.28 In addition to ESL I and ESL II, the Bank has made seven new loans in the
energy sector. These include: WAPDAIV and V (Loans 2499-PAK and 2556-PAK) for the
least cost expansion and reinforcement of the secondary and high voltage transmission
grid. The Petroleum Resource Joint Venture Project (Loan 2553-PAK) to assist GOP in
mobilizing PS involvement in exploration and development of oil and gas; the Kot Addu
Combined Cycle Power Project (Loan 2698-PAK) to add another 250 MW of generating
capacity through the conversion of combustion turbines to combined cycle operation;
the Power Plant Efficiency Improvement Project (Loan 2792-PAK) for the rehabilitation
of existing power plants and conversion of combustion turbines to combined cycle
operation; the Refinery Engineering and Energy Efficiency Project (Loan 2218-PAK) for
restructuring product output and streamline existing systems; and the Private Sector
Energy Development Project (Loan 2982-PAK), the first of its kind to be approved by
the Bank (FY88).
1.29 The proposed Project would be the Bank's ninth operation with WAPDAincluding
the proposed Rural Electrification Project (RE) which is expected to be presented to
the Board concurrently in FY90. The first three operations have been completed and
the remaining four are being implemented satisfactorily. The Project Performance Audit
Report (PPAR) and the Project Completion Report (PCR) for the Third Power Project (Loan
968-PAK and SAC 39-PAK) was distributed to the Executive Directors in April 1989. The
PPAR concluded that the project not only improved the supply of electricity, but also
all aspects of WAPDA's operations including administration, technical and financial.
Despite these achievements, the project was completed three years behind schedule.
Similar delays also were experienced in the two previous projects. These are
attributable to delays in the appointment of consultants, the award of contracts and
clearance of PC-1 documents, as well as the periodic scarcity of local funds. In order
to minimize delays in start-up, the Bank, under subsequent operations, has assisted
WAPDAin preparing standard bidding documents and has provided training to its staff
-9-
2.01 WAPDA, the Borrowerof the proposedLoan, was establishedin 1958 as a semi-
autonomous agency to coordinate the development of Pakistan's water and power
resources. It is divided into two largely independent'wings':one for Power and the
other for Water. The Power Wing is responsiblefor the planning, constructionand
operationof power generation,transmissionand distributionfacilitiesthroughoutthe
country, except the Karachi area which is served by KESC. The Water Wing is
responsiblefor the overall planning and investigationof water resources,and the
design and constructionof surfaceand groundwaterdevelopmentprojectsfor the federal
and provincialgovernments. WAPDA's governingbody, referredto as the "Authority",
consistsof a chairmanand threememberswho are in charge of power, water and finance,
and are designatedMember (Power),Member (Water)and Member (Finance),respectively.
The members of WAPDA's governingbody are appointedby the Government.
2.02 The organizationof the Power Wing of WAPDA, which for convenienceis herein
referred to as WAPDA, is shown in Annex 2.1. Member (Power) is assisted by seven
general managers in charge of thermal generation,hydel generation,transmissionand
grid stations,distribution,finance,coordinationand planning,system operationand
load dispatchand inventorycontrol. AlthoughWAPDA is highly centralizedwith respect
to decision-making, its distributiondepartmentis divided into eight Area Electricity
Boards (AEBs),which were establishedin 1981 to take over the responsibilityfor local
electricityservice. Each AEB has a chairman,who is the chief engineerfor the area,
appointed by WAPDA for a five-year term; three full-time members, who are also
directors in charge of departments;and three part-time members representinglocal
interes:s,one of whom is normallya representativeof the ProvincialGovernment. The
members of AEBs are appointedfor a period of three years.
2.03 In October 1988, WAPDA had about 150,300 employees; 4,320 engineers, 980
other professionals,11,230 technical and other staff, 28,030 administrativeand
accounts staff, 69,430 skilled workers and about 36,310 other employees including
unskilled workers. The number of consumers served by WAPDA in 1988 was about 5.7
million, representing about 38 consumers per employee. The relatively low
consumer/employee ratio reflectsthe overstaffingof the distributiondepartment. The
inefficienciesresulting from this overstaffing,together with the relativelyhigh
level of losses in distribution,stemmingfrom inadequateinvestmentsin the past, are
contributing to substantial leakages in revenues and denying WAPDA the resources
requiredfor implementingan expandedinvestmentprogram. The agreementreachedunder
ESL II on the establishmentof a self-containeddistribution wing within WAPDA
supportedby comprehensivetechnical assistance,financedby USAID, in the areas of
finance, billing, collections, data processing, servicing and operations and
maintenance,is designedto address these issues (para 4.16).
ExistinaFacilities
Load Xanagement
2.05 Despite the substantial increase in generating capacity between FY86 and
FY89, load-sheddingcnntinues. In June 1988, the shortfall between demand and
generating capability was about 1,000 MW. Although load shedding is expected to
continuewell into the mid 1990s, the projected increasein the installedcapacityby
the private and public sectors (para 2.09) and better management of demand through
price and non-pricemeasuresare expectedto reduce the capacityshortagesduring the
dry season to about 600 MW by FY93. In the area of pricing,GOP has agreed under ESL
II on the adjustmentsin the level and structure of tariffs and on the introduction
of peak/off-peakpricing for 300 of the largest industrialconsumers of electricity
(paras 4.03 and 4.04). As for non-price measures, GOP plans to continue direct
curtailmentof supply to major industrialand agriculturalconsumerson the basis of
an agreed schedule to allow consumers to adjust their activitiesand rotate load-
shedding to household consumers. In addition, under the Bank's Private Tubewell
DevelopmentProject,WAPDA is implementinga pilot program to assess the technicaland
economicviability of restricting tubewell operationsthrough ripple control, time
switches and splitting and controlling residential and tubewell load by phases.
Provision has been made under the proposed RE Project which is being processed
concurrentlywith the proposed Project, for the installationof: (a) specially
designedmeters requiredto introducepeak/off-peakpricing for 300 industrialand bulk
consumers; and (b) the equipment proven viable for restricting the operations of
tubewells.
Power Planning
2.06 Power system planning is carried out in-houseby WAPDA's staff. The first
nationalleast-costgenerationexpansionprogramwas formulatedunder the Fourth Power
Project (Loan 2499-PAK)with the assistanceof Argonne NationalLaboratory(ANL, a US
agency)under financingfrom UNDP with the Bank as the executingagency. In addition,
trainingwas providedto WAPDA's staff by ANL, under the auspicesof the International
Atomic Energy Agency, in the use of the Model for the Analysis of the Energy Demand
(MAED) and the Wein Automatic System Planning (WASP) computer models, which were
installed on WAPDA's computer in early 1986. This ha; enabled WAPDA to revise the
least cost program, as and when needed, to incorporatethe updated informationon the
operation of the subsector includinghydruljgy,water managementand pattern of the
electricityconsumption. Transmissionand distributionplanning is also carried out
on an ongoing basis by WAPDA's staff and consultantsrecruited as and when needed.
CIDA has assistedWAPDA since 1974 in developingin-housecapabilitiesfor the 500-kV
network and, under a Distribution Development Program (DDP), USAID is presently
strengtheningthe distributionplanning function.
Training
DevelopmentProgrxa.m
1. Public Sector
WAPDA
Tarbela Hydro 1993 11 through 14 432 1728
Manglt Hydro 1993 9 and 10 100 200
Chashma Hydro 1994 1 through 22 12.3 271
Jamshoro Steam 1990 1 through 3 210 630
Jamsharo Steam 1991 4 250 250
Muzaffargarh Steam 1992-93 1 through 3 210 630
Ouddu Combined Cycle 1993 1 300 300
Lakhra FBC 1992 3 50 150
Subtotal 4159
KESC
Ben Qasim 1989 3 through 5 210 630
Subtotal 630
II. Private Seetor
2.11 TransmissionProgram. Major hydro resources are located in the north and
thermal facilities and load centers are concentratedin the center and the south.
Hence, for the efficientevacuationof electricityover long distances,in the early
1970s WAPDA initiated the implementationof a least cost national program for the
developmentof an extra high voltage (EHV) network to connect the major generating
plants to the main load centers in the country with the 500-kV grid. The first EHV
line between Tarbela and Faisalabad,was completed in 1977. Since then, further
sectionshave been successivelybuilt southwardswith assistancefrom CIDA and the Bank
(Loans 1208T-PAK and 2556-PAK). Presently, three EHV lines are in operation and
anothertwo are under implementation.The 500-kV lines in operationincludetwo routes
between Tarbela and Faisalabadand one between Faisalabadand Jamshorovia Multan and
Guddu. Those under implementationincludetwo additional500-kV linesbetween Tarbela
and Lahore and between Lahore and Jamshorovia Sahiwal,Multan, Guddu and Dadu. The
Tarbela-Lahoreand Lahore-Jamshorolines are expectedto be completedby 1991 and 1992
respectively.
2.12 WAPDA has recentlyupdated its least cost program for the developmentof the
EHV network,which takes into account the forecastexpansionof generatingcapacity.
In addition to completingthe ongoing projects includingthe 500-kV lines as well as
the expansionand reinforcementof the secondarytransmissiongrid, the program calls
for the installationof: two single circuit 500-kV lines between Hab Power Complex
(HPC) locatedin Baluchistan,and Jamshoro;a third single circuit 500-kV line between
Guddu and Multan; and a second single circuit 500-kV line between Multan and Lahore.
This transmissionexpansionprogram constitutesthe CIP for the Seventh Plan period.
Proiect Setting
3.02 During the Fifth Plan and Sixth Plan,WAPDA experiencedshortagesof financial
resources which forced it to concentrateits resources on generation and, to much
lesser extent, distribution. As a result, transmissionwas developed on an ad hoc
basis, dictatedby the need to evacuatepower. ESL I and WAPDA IV and V have rectified
some of this imbalance; however,additionalinvestmentsat the 500-kV level are still
required,if the network is to develop in step with the generationdevelopmentprogram
agreed under CIP. In fact, the inadequacyof this network is increasinglybecoming
a constrainton WAPDA's ability to efficientlydispatchpower to meet the demand for
electricityat least cost.
Proiect Obiectives
3.05 The proposed Projectwould: (a) contributeto the implementationof CIP for
FY89-93 for transmissionthrough: (i) extension and reinforcementof the 500-kV
network to ensure adequate and effective evacuationof power from the main thermal
- 14 -
power generationcenters at Guddu and Multan to the major load centers in the middle
and northernregion of the country;and (ii) extensionof the transmissionlink between
the HPC (1,300 MW), the first major power project to be financed, constructed and
operatedby PS, and the national500-kVnetwork;and (b) continueinstitutionbuilding
efforts initiatedunder the Bank's earlierlendingoperationsby strengtheningWAPDA's
capabilitiesin implementing,operating and maintaining an efficient and economic
transmissionsystem.
Proiect Descrition
(d) consulting services to assist and train WAPDA's staff in the design,
construction,operationand mainteianceof the 500-kV network.
Prolect Cost
3.07 The total cost of the proposed Project, including price and physical
contingenciesand customsduties,is estimatedat US$393.0million equivalent,of which
taxes and duties amount to about US$153,.7million equivalent. The total financing
requiredfor the proposedProject, includinginterestduring constructionof US$70.1
million equivalent, is about US$463.1 million. Of the total financing required,
US$162.0 million would be in foreign exchange, and the remaining US$301.1 million
equivalentwould be in local costs. The cost estimates are based on quotations
receivedby WAPDA over the past 12 months for similar equipment,servicesand works,
updated to June 1989 prices. A provision of 51 of the base cost has been made for
physicalcontingencies,based on the experiencewith similarprojectscurrentlyunder
implementation.Escalationof foreigncosts was assumed to be 7.2% for FY90, 6.51 for
FY91, 5.01 for FY92, and 4.51 per annum thereafter. Escalationof local costs was
assumed at 10.01 for FY90, 8.0X for FY91, 7X for FY92, and 6.51 per annum thereafter.
Total price escalationamountsto 24.91 of the base cost plus physical contingencies.
A summary of project cost is presented in Table 3.1 below and details are given in
Annex 3.2.
- 15 -
Prolect Financing
3.08 The proposed Loan of US$162 million would be made to WAPDA with GOP as the
guarantor. WAPDA would bear the interestrate risk and any cost overruns. GOP would
bear the foreign exchangerisk and provide repaymentguaranteeto the Bank, for which
WAPDA would annuallypay 3-1/21 on the outstandingloan amount to GOP, representing
the foreign exchange insurance premium which is collected by the State Bank of
Pakistan. The proposedLoan would cover 100X of the foreign exchange requirement and
representsabout 35Z of total financingrequired. Of the localcost requirement,about
US$189.4million equivalentwould be financedby WAPDA from internalsources,and the
balance amounting to US$111.7 million equivalent through local borrowings. The
financingplan for the proposedProject is summarizedin Table 3.2 below.
------
Rs Million------- ------
US$ Million------
Local Foreign Total Local Foreign Total
The financing requirementsof the proposed Project are within the limits agreed to
under ESL II to contain the growth of expenditureswith a view to reducing the fiscal
- 16 -
deficit and dampening the potential for inflation. For the period FY90-FY93, the
expendit-ines to be incurredunder the proposed Project amount to US$ 216.0 million
equivalent, compared to the agreed target of US$ 192.0 million equivalent. The
increasein expendituresis attributableto higher inflationthan was envisagedat the
time of the appraisalof ESL II. It is importantto note that as the proposedProject
is part of WAPDA's CIP for FY89-93,the local borrowingsfor the proposedProject are
part of WAPDA's overall borrowingprogram for the FY89-93period.
Proiect Preparation
3.10 The national 500-kV network, been planned to withstand faults without
system separation,line overloading,cascade trippingor loss of load. To ascertain
adequatedesign for each new extensionof the 500-kV network, includingthe proposed
Project, specific studies were carried out in the following areas: load flows for
normal and emergencyconditionsand in typical cases of generationduring low water
and high water seasons;short circuits;transientand steady state stability;reactive
power management for improvementof system power factor; mechanical and electrical
design for the conductorselection,tower.structure
and substationlayout;and control,
metering and relaying scheme in associationwith telecommunicationrequirementsand
integration into the system control and data acquisition (SCADA) network. These
studieshave been reviewedby the Bank and found satisfactory.
Proiect ImRlementation
3.14 WAPDA has established two regional offices, one in Hyderabad and one in
Lahore, headed by Chief Engineers, to supervise the implementationof the 500-kV
network in the northernand southernareas, respectively. Each office is adequately
staffed with experiencedpersontnelin transmissionline constructionsupervisionand
management. The Bank reviewed the capabilitiesof these offices and found them
satisfactory.
to secure
from the Borrower satisfactoryto the Bank that all necessary_jrangeements
Rreliminaryfinancialcommitmentshave been completedfor the gonstAuctionof HPC is
set as a condition of disbursementof expendituresfor the HPG component.under-the
orooosedProiect (para 6.03).
Procuremenmt
ICB: InternationalCompetitiveBidding
LIB: Limited InternationalBidding
Other: Other Procurement Arrangements
3.18 Bidding documents and recommendations for each contract, exceeding the
equivalentof US$1,000,000to be financedunder the proposed Loan, would be subject
to prior approvalby the Bank. This would amount to Bank review of more than 70% of
the total contracts financedunder the proposedLoan. Other Bank-financedcontracts
would be subject to post-award review. Consultants for studies and technical
assistancewould be selected in accordancewith Bank guidelinesand employed under
terms and conditionssatisfactoryto the Bank.
Disbursement
3.19 The proceeds of the proposed Loan would be disbursed against: (a) 100% of
the CIF cost of imported goods and services; or (b) 100% of ex-factory costs of locally
manufacturedgoods, both being subject to ICB. Eighty percent of the erectioncosts
up to a total of US$20.0 million would also be financed under the proposed Project,
subject to ICB. Disbursementswould also be made against 100l of the foreign exchange
cost of consultancyand trainingservices.Disbursementsup to US$5 millionwould also
be made against the CIF cost of goods procured through LIB. To facilitate
disbursements,a SpecialAccount shall be establishedby WAPDA with a commercialbank
in Pakistan. The Special Account would cover about four months of average loan
expenditures,equivalentto US$6.0million,replenishedand operatedin accordancewith
- 20 -
Training
3.20 A training program has been institutedby WAPDA for the last 15 years to
develop the necessary personnel for the planning, operation and maintenance of the
generation, transmission and distribution systems (para 2.07). In the area of
transmission,special emphasiswas on the trainingof staff to operate and maintain
the 500-kV lines and grid stations. Canadianutilities,under CIDA financing,have
providedsubstantialassistanceto WAPDA. The initialphase of the trainingstarted
in 1974 when the first team of WAPDA engineers were trained in Canada using the
servicesof BritishColumbiaHydro. In 1981, a more comprehensiveprogramstartedwith
the establishmentof a specializedtrainingcenter at Tarbela, and over a period of
two years Ontario Hydro has provided experts to train WAPDA's staff and instructors
in the areas of line maintenance, grid station operation and maintenance, and
associated protection and instrumentation. A follow-on, five-year program was
institutedby WAPDA with supportfrom CIDA and with participationof Ontario Hydro to
provide on-the-jobtrainingfor the staff after their initial trainingat the Tarbela
school and to assist in the developmentof a head office team of technical support
within the Transmissionand Grid Department. The program includedalso the training
of WAPDA's staff overseas .wdthe purchaseof equipmentand tools and essentialspares
for the conduct of the field training. WAPDA has also installedat the Faisalabad
Training Institute a grid simulatorwhich enables its staff to be trained regularly
in the operationof the system.
Risks
Project Monitoring
3.25 WAPDA will submit to the Bank quarterly reports, covering the work of
consultants,physicalprogress,projectcosts,disbursementsand administrative aspects
of the Project. In addition, it would also submit quarterly and annual financial
reports and other pertinent informationto the Bank. WAPDA would also undertake to
prepare and furnish to the Bank, within three months after the closing date, or such
later date, as will be agreed for this purpose, a Project CompletionReport of such
scope and detail, as the Bank shall reasonablyrequest.
IV. FINANCES
Introduction
4.01 WAPDA's financial affairs are governedby the WAPDA Act which requiresthe
utility to generate sufficientrevenues from electricity sales to cover operating
costs, includingdepreciationand debt service, and achieve a reasonable return on
investment. Under the First WAPDA Power Project (Credit 213-PAK),WAPDA agreed to
achieve a rate of return of 8% on revaluedaveragenet fixed assets in use. However,
because of GOP's reluctanceto revalue assets, this covenant was replaced in FY76,
under the Second WAPDA Power Project (Loan 1208-PAK),by an internalcash generation
(ICG) covenant. It requiredWAPDA to generateannuallyfrom internalsources,30% of
the capital expenditures,averagedover the previous two years and the current year
without taking into account the changes in working capital. In order to ensure that
adequate local funds were available for the implementationof WAPDA's expanding
investmentprogram,the ICG requirementwas raised to 40% in FY80 under the Third WAPDA
Power Project (Credit968-PAK). In each of the followingsix years, except FY85, WAPDA
was able to comply with this covenant. This compliancewas achieved at the expense
of substantialslippages in WAPDA's investmentprogram facilitated,in part, by the
retrospective nature of the ICG formula which encouraged the postponement of
investmentswhen tariff increasesto comply with ICG covenantwere deemed politically
unacceptable. 'twas in the contextof these slippagesand the accompanyingshortfalls
in generatingcapacity that agreementwas reachedwith GOP and WAPDA under ESL I on
- 22 -
a Rs 30 billion CIP for the period FY86-88. The purpose for agreeing on a CIP for
each year over a three year period, clearly allocating resources to generation,
transmissionand distribution,was to eliminatethe option of postponing investments
in order to avoid tariff increasesto meet the ICG covenant. Furthermore,begin.'Ing
FY89, the formulafor computingICG was changed,to considerthe averageof investments
over the revious,current and ensuingyear as well as the changes in working capital
other than cash. The new formula changed the requirementsfor calculatingICG from
retrospectiveto a prospectivebasis which togetherwith the agreed CIP ensures that
the revenuesneeded for the new agreed investmentprogram are generated.
Electricitv Pricing
the fuel cost to be incurredin FY90. To this end, GOP has changed,effectiveJuly 1,
1989, the fuel surcharge recoveryformula to enable WAPDA to recover nearly 100% of
the fuel cost. In view of the criticalneed to mobilize revenuesin a timely manner
for CIP, GOP and WAPDA have agreed to implement all necessary actions, including
increasingin electricitytariffs,to enableWAPDA to complywith the 40X ICG covenant
for FY90 as a condition of effectivenessof ESL II (Ln. 3107-PAK). Accordingly,
failure to comply with this conditionof effectivenessof ESL II would result in all
future Bank lending in energy to Pakistanbeing held in abeyance. However, GOP has
increasedWAPDA's electricitytariffsby an averageof 161 effectiveSeptember1, 1989,
which would result in an average increasein tariffs for the whole of FY90 of about
121. Although further details are awaited,preliminaryestimates indicate that the
recent tariff increases,togetherwith the enhancedrecoveryof the fuel cost for FY90
through the change in FAS, would enable UAPDA to comply with the 401 ICG covenantfor
FY90.
4.04 Since the initiation of ESL I, GOP, WAPDA and KESC have taken steps to
rationalizethe structureof electricitytariffs such as broadeningthe applicability
of the fuel surcharge clause (para 4.03), and increasingthe tariff for agricultural
and household consumersby 211 comparedwith an 11 increasefor industrialand bulk
consumers in FY89. As a result, residential consumers who account for 79% of
connectionsand consume 351 of electricitysold, accountedfor 291 of the revenuesin
FY89 compared to 251 in FY88. Similarly,agriculturalconsumerswho account for just
over 201 of the connectionsand consume 211 of electricitysold, accountedfor 151 of
the revenuesin FY89 comparedto 111 in FY88. In contrast,industrial,commercialand
bulk consumerswho account for just over 161 of the connectionsand consume42% of the
electricitysold, accountedfor 481 of revenue in FY89 compared to just over 571 in
FY88. Despite these improvements,there is still, however, a need for an overall
rationalizationof the tariff structure. Therefore,under ESL II, GOP has agreed to
increasethe agriculturaltariffs at a higher rate than for other consumers in FY90
and FY91. Accordingly,during the recent tariff increaseseffectedin September1989
(para 4.03), the tariffs for agriculturalconsumerswere increasedby more than 27%
compared to 141 for resident consumers, 91 for industrialand 151 for commercial
consumers. Furthermore,as a componentof the proposedRural ElectrificationProject,
peak/off-peakpricing would be introducedto the 300 largest industrialconsumers,
which account for about 201 of electricitysales, by providing them with specially
designed m-nters. This would contributesignificantlyto rationalizingelectricity
consumptionduring seasonaland daily peak demanctperiods.
Past Operations
4.06 Comparedwith the 401 ICG covenantagreed with the Bank under the Third WAPDA
Power Project (para4.01), the ICG levelwas 371 in FY85 as a result of actual capital
expendituresbeing larger than planned without correspondingtariff increases. In
FY86, however, in accordancewith the agreementreached under ESL I, initiationof
measures to ensure compliancewith the ICG covenant,includinga 9% across-the-board
increasein tariffsfor all categoriesof consumers,resulted in an ICG level of 501,
but in FY87, the ICG level dropped to 351 despite the broadeningof FAS (para 4.03),
primarilybecauseof a decline in revenuesdue to the introductionof flat rate tariffs
for agriculturalconsumers'/and a lower hydel generationthan forecast. In FY88,
followinga 13.41 tariff increase,the ICG level reached44X. However,for FY89,WAPDA
achievedan ICG level of 331 despitea tariff increaseof 12.81 effectiveJuly 1, 1988.
The primary reason for the shortfallin ICG from the covenantedlevel of 40% is due
to the switchoverfrom the retrospectiveto the prospectiveICG formula (para 4.01).
Under the retrospectiveformula,the average 12.81 tariff increasewould have resulted
in an ICG level of 441 for FY89. In view of the fact that asset commissioningclosely
followedthe CIP, variationsin operatingincomewere the main cause for fluctuations
in the utility's return on historicallyvalued net fixed assets in use, from 121 in
FY85 to a low of 11.51 in FY87 and improvingto 17.31 in FY89.
Consumer Contributions
Prlor to the Introduction of flat rate tariffs for agricultural consumers in FY87, the expected
average rvenue per kWh, including FAS,from this category of consumers was 61 paisas in Punjab/Sind provinces
and 47.4 in NWMP/Baluchistanprovinces. Following the introduction o,fflat rate tariffs. the corresponding
average revenue/kWi realised, wa 27.1 palsas and 11.8 paisas, respectively, resulting in a revenue reduction
of about Rs 550 millon.
- 25 -
which is about seven years. Such a measure would: (a) not be a burden on the
agriculturalconsumer; (b) provide necessary funds to WAPDA to in fact carry out the
tubewellelectrification;and (c) eliminate the financialburden on WAPDA. GOP and
WAPDA have agreed under the proposedRural ElectrificationProject to be presented to
the Board in FY90, to take, by July 1, 1990 the necessarymeasures to enable UAPDA to
recoverthe connectioncosts from agriculturalconsumersover the economiclife of the
tubewell.
CustomerSecurityDeposits
AccountsReceivable
4.09 Accounts receivableas of March 31, 1989, amounted to Rs 4,510 million and
Rs 3,285 million of these are consideredoverdue, i.e. they are outstandingfor more
than three months. Of the overdue amounts,Rs 1,568 million are from GOP departments
and agencies and the balance of Rs 1,717 million are from private consumers.
Receivablesfrom private consumersrepresentabout two months' average sales and from
GOP departmentsand agencies,2.7 months'average sales. Under the Fourth WAPDA Power
Project (Loan 2499-PAK),GOP is to ensure that receivablesfrom its departmentsand
agencies are not more than three months' average sales to them. Overall, accounts
receivablerepresent2.2 months' sales which is satisfactory,but a large portion of
the outstandingaccounts is overdue and may be uncollectibleas summarizedin Table
4.2.
4.10 At the end of FY89, WAPDA's debt/equityratio was 58/42 comparedto 52/48 at
the end of FY85 due to large investmentsduring the per'od FY85-89being financedfrom
debt.Despite the deteriorationin the debt/equityratio, the capitalstructureremains
satisfactory.Since FY88, WAPDA's local debt 4-s comprisedfundsborrowed throughthe
issuanceof bonds in the local financialmarkets with five-yearmaturities. Through
such bond issues, WAPDA was able to raise about Rs 3.1 billion in FY88 and Rs 5.7
billion in FY89. As these bonds can be encashedprematurelyand WAPDA had not set up
a sinking fund to retire these bonds, the National DevelopmentFinance Corporation
(NDFC), the manager of the FY89 Bond Issue, has retained Rs 500 million from the
proceedsof these bonds. These funds are being utilizedby NDFC to discount the bonds
for any bondholder that wishes to encash the bonds prematurely. Such a mechanism
providesliquidityto the l-ndholders,giving hope to the possibilityof a longer term
maturity for any future instrument issued on the domestic financial markets. In
addition,WAPDA has now set up a sinking fund to avoid steep increases in tariffs in
the year of retiring the bonds, since the repayment of bonds is a part of the debt
service for that year. Nevertheless, in view of the fact that bonds worth
approximatelyRs 8.8 billion are outstanding,the funds set aside for carrying out
discountingof bonds could become insufficient. In addition, in order to improve
WAPDA's financialdisciplineand mitigate the need for sharp tariff increases,there
is a need for regular monitoringof the amountsset aside in the sinking fund. WAPDA
has agreed, as part of the FMIP under the proposedRural ElectrificationProject to
be presentedto the Board in FY90, agreed to review with the Bank, not later than June
30 of each year beginning with 1990, the arrangementsfor setting aside annually,
amounts in a sinking fund to be used to retire the bonds issued by WAPDA in FY88 and
FY89.
4.11 WAPDA's capital expenditureprogram for the period FY90-95, covering the
project implementationperiod together with the annual phasing of expendituresfor
ongoingand new projectsis presentedin Annex 4.2. The program and proposedfinancing
plan are summarized in Table 4.3 below. The first three years of this program
constituteCIP agreed to under ESL II.
Table 4.3: WADAs Cmital ExmenditumPruri mid Fimcim Reminmnts CFT90- FY95)
Rs Million Us#Mition X
Recuirements
Capitat Investment:
Generation 75,639 3.494 52
Transmission 21,377 987 15
Distribution 32.U4 1.498 22
Subtotal 129,U0 5,979 89
WorkingCapital Increase , 706 1
Total Requirements t44.727 6.685 100
Sources
Gross Intemal Sources 14,067 6,654
Less: DebtServiceL 79.292 3662
Net Internal CashGeneration 64,775 2.992 45
Borrowings:
Local Loans 28,615 1t322 20
ForeignLoans 47,830 2,209 33
ProposedLoan 3.51 62 2
Total Borrowings 79,952 3,693 55
Total Sources M.= 68 100
/a Includes interest during construction ard an aljt payment
of Rs 20 million paymentto GOP
for assets earlier transferred to WAPDA.
- 27 -
4.12 The Bank has reviewedthe investmentand financingplan for its content,size
and allocationand found it satisfactory. However, there is a need for an annual
reviewwith the Bank of WAPDA's investmentprogramduring the SeventhPlan. Therefore.
WAPDA agreed to review before May 15 of each year. its capital expenditureorogram and
financingplan for the ongoing and the ensuingyear and agree with the Bank on steps
necessarv for implementation(Rara 6.01).
Future Finances
4.15 In order to ensure that coverageof WAPDA's debt service by gross internal
cash generation continues to be satisfactory,the debt limitation covenant under
ongoing Bank Group operationswould be repeatedunder the proposed Project, which
provides that WAPDA would consult with the Bank. should it incur new debt that would
result in its gross internal cash generationbefore debt service (includingpayment
to GOP) fallingbelow 1.5 times the debt service requirement(Para 6.04(c)).
Accountingftstams
FinancialOrganization
InternalAudit
4.18 Although WAPDA has a large Internal Audit Department, its systems and
proceduresare outdated and its responsibilities have not been enhanced to suit the
utility'srecent growth in size and complexity. In recognitionof this, WAPDA, under
financingfrom USAID, has engaged consultantsto develop a modern internalauditing
system. The consultantshave completedtheir work and the draft final report is under
review by WAPDA and the Bank. In order to strengthen the internal audit function,
which is fundamentalto the evaluationof the utility's internal control system as
- 29 -
xternal Audit
4.19 The responsibility for auditing WAPDA's accounts rests with the Auditor
General of Pakistan (AG) who dischargesthis responsibilitythrougha DirectorGeneral.
The Director General, WAPDA Audit, is assigned to WAPDA on a permanent basis together
with a staff of about 400. WAPDA is required by the WAPDA Act, which mirrors the
Bank's audit requirements,to finalize the annual accountsand have them auditedwithin
six months of the end of the financial year. However, the inordinate delays in the
flow of financial informationand the absence of an effective internal audit system
which is needed to support the external audit in view of the geographicalspread and
magnitudeof WAPDA's operations,precludethe fulfillmentof the WAPDA Act stipulation.
At present, the AG's PreliminaryAudit Observationsare issued within six months of
the end of the financial year, together with the utility's certified financial
statements. With the improvement envisaged in the flow of financial information
through the automation of its accounts system and financial information (para 4.16)
and the strengtheningof the internalaudit function, it is expected that WAPDA would
be in a position,beginning FY92 to have its finalizedannual accounts audited within
six months of the end of the financialyear. Nevertheless,in order for the Bank to
preserve the right to request an audit of WAPDA's finalizedaccountswithir.six months
of the end of the financialyear, the Bank's standardaudit covenantwhich is included
under all ongoing WAPDA Power Projects is repeated under the proposed Project.
Therefore. WAPDA has ag-reedto have its finalized accounts audited and furnished to
the Bank as soon as available,but in any case not later than six months after the end
of each such yea. (gara 6.04(d)).
Insurance
4.20 Prior to 1977, WAPDA placed its insurance with the National Insurance
Corporation of Pakistan, a Government-ownedinsurance company. Due to difficulties
in settling its claims with this agency, WAPDA elected to insure its assets under a
self-insurancescheme. This scheme was established in 1981 with the assistance of
actuarial consultants,and covers substations,power houses, machinery and workshops
against loss from fire and machinery breakdown. Since that time, WAPDA's assets have
increased f,urfold, and therefore there is a need for a new actuarial study to be
conducted to determine rates of annual contributionsto the self-insurancescheme in
order to set aside sufficient funds for covering losses from fire and machinery
breakdown. As part of the FMIP under the proposed Rural ElectrificationProject to
be presentedto the Board in FY90. WAPDA agreed to: (a) appoint,by no later than June
30, 1990, consultants whose qualifications,terms of reference and experience are
satisfactoryto the Bank to complete an actuarial study for the utility by March 30,
1991; and (b) implement the recommendationsof the study by June 30, 1991.
V. ECONOMIC JUSTIFICATION
5.01 WAPDA's electricity sales increasedover the past decade at an average annual
rate of about 12X, from 6,490 GWh in FY78 to 20,702 GWh in FY88. This relativelyhigh
rate of growth is attributable to: (a) the unprecedented growth in demand for
- 30 -
Actuat FarlAt
vAaae AnnualGrowthRate (X} Averae AnnualGrowthRate (1)
F178-88 F-"
Energy Sold 12.3 10.5
Residentlot 20.1 14.1
Cmwercal 13.2 12.7
Induatrial 9.1 9.2
AgrIculture 9.9 5.6
5.03 The proposed Project has been prepared by WAPDA with the assistance of
consultants, NESPAK. The options considered by WAPDA for the HPC-Jamshoro and
Jamshoro-Lahorelinesincludedalternativerouting,voltagelevels,line configuration,
etc. The analysis,which was reviewedby the Bank and found satisfactory,showed that
the selectedlines would effect evacuationof power at least cost in terms of capital
and operatingcoste and would minimize transmissionlosses.
C. InternalEconomicRate of Return
5.04 Although the proposedProject is essential for the optimal operationof the
power system, its benefits cannot be isolated from those required for the overall
development of the subsector. Consequently,the return on the investments to be
undertakenby both WA2DA and PS during the period FY90-95, is taken as a proxy for
the return on the proposedProject. The internaleconomicrate of return (IERR) for
the investmentprogram is about 81, based on measurable costs and benefits. The
measurablecosts include: (a) capital costs of the generation,transmissionand
- 31 -
5.05 The IERR of 8X which was based on the prevailing tariff is lower than the
opportunity cost of capital of about 10. This is a reflection of the deviation
between the prevailing tariff and the economic cost of supply (LRMC) rather than a
measure of the economic merit of the proposed Project. WAPDI.'sprevailing average
revenue reflectssustainedincreasesin tariffswhich were initiatedunder ESL I, and
reinforcedthroughproject lendingthereafter. These increaseshave raised the average
revenue from 521 of LRMC in FY85 to 741 in FY89. Under ESL II, GOP has agreed to
continue the adjustmentof tariffs in order for WAPDA to meet from internal sources
40X of CIP for FY89-93. These increaseswould amount to an average annual rate of
about 10, which would raise the average revenue to about 90% of the LRMC by FY93.
If the average revenue resultingfrom tariff increasesagreed under ESL II are taken
as a proxy for the consumers'willingness to pay and hence, the estimationof the
measurablebenefits associatedwith the proposed Project,the IERR would increaseto
142 which is a better measure of the economicmerit of the proposedProject. Details
relating to the assumptionsand calculatignsof the IERR are presented in Annex 5.1.
(a) approval by ECNEC of the PC-Is for all componentsof the proposed Project
(para 3.09);
(b) WAPDA to take all necessary actions to generate each year from internal
sources 401 of its capital expenditaresaveragedover the previous, ongoing
and one ensuing year as stipulatedunder Loan 2499-PAK (para 4.14);
(c) WAPDA to consult the Bank should it seek to incur new debt that would result
in WAPDA's internalcash generationbefore debt service and payment to GOP
falling below 1.5 times the debt service requirement(para 4.15); and
(d) WAPDA to submit to the Bank its finalizedaccountswithin six months of the
end of the financialyear (para 4.19).
N~~~~~~~~~~~~~b.mm~~~~~~~~~~~~~~~~~~~~~~
~~~~~~an)~~~~~~
l. F1b
rll~~__________~~~
I d - I
o
~
_~~~~~ ~ ~~~~~~~~ Aumm& (S) Ib~w (
-a __
Nco
-35-
Annex 3.1
Page 1 of 4
PAKISTAN
TRANSMISgIONEXTENSIONANp REINFORCEMENT
PROJECT
ProjectDescrintion
A. HPC to JamshoroTransmissionLines
3. These figures are about 20X higher than normal weight towers. In
addition,in order to minimizethe corrosionand erosioneffect of the pollution-
carryingwinds specialprovisionfor rubber paint coating on the towershas been
made. V-stringswere choren as theirperformanceunder contaminatedconditions
is superior to that of vertical strings for the followingreasons: (a) tests
have shown that the amount of contaminationdeposit is 80X of that of a vertical
string; (b) higher washing performancecan be achieved; and (c) slurry spray
tests have demonstrateda higher flashover withstand capability. Although
-36-
Annex 3.1
Page 2 of 4
(b) The Multan - Gatti - Lahore segment will follow the route of the
first 500-kV line to Gatti on the north side of the Ravi river,
where a major 500-kV substationexists connecting to the Tarbela
hydrostation. This segment,which creates a 500-kV ring with the
second 500-kV line through Sahiwal for greater reliability and
economy, would be about 300 km in length. It would require the
installationof about 875 steel towers and associatedhardware, (4-
bundle per phase)Drake-typeconductors,insulatorsand communication
equipment.
Guddu Extension 1 1 1 3
Multan Extension 2 1 1 3
Gatti Extension 2 1/3 1 1
Lahore Extension 1 1 3
will be establishedafter
al Tentativerequirement. Actual requirement/rating
detailed studies.
D. ConsultancvServicesand Training
9. This component will be required to: (a) assist WAPDA in the design,
engineering and construction of the transmission lines and substations;
(b) provide an independent review of line design by expert consultants;
(c) provide consultingservicesrequiredto solve difficult or unique problems
such as the high pollution levels in the Karachi area; (d) assist WAPDA to
install and operate up-to-datemonitoring systems of the transmissionsystem
includingthe use of advancedsensors,displayand recordingsystems;(e) assist
-38-
&nnx 3. 1!
Page 4 of 4
;
PAKISTAN
PROJECT
TRANSMISSIONEXTENSIONAND REINFORCEMENT
SIngll Une Diagram
iw
mw mw
N @W
mw h
| dw am
~~~
4m ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ S
4a *nI
t Q
_ ExEdt~w ct8zder
i
44 4 r v=evrvfii " Rf p*
~~
x xx ~ ~ ~ ~ ~ ~ ~ ~ m~0
...
~~~~~~~~~~~~~~~~~~~~~~~~~
1111S113
7iiislISSIOI111115101
130miIIocmllt PROJICt
CostEstiute 1/
Project
(IslIllios. (US$llio)
-----------------------------------.- .. ... .... .... .................. ................................. .........
..............
.....
SubtotalCIqip
et 1,156.2 2,257.9 1,244.0 0.0 5,260.1 81.2 104.3 57.5 0.0 213.0
C. Ereetiom
madClivilorkt 2U.? 221.1 30.0 539.8 13.3 10.2 1.4 6.0 24.0
9
3.Ilmerilg aiddubolatrtlot 6.0 0.0 0.0 448.6 448.6 0.0 0.0 0.0 20.7 21.1
1. Tran
lulg 78.0 7J.O 0.0 0.0 0.0 3.6 3.6
I.Other
kpiig 31.3 60.0 0.0 116.3 1.7 3.? 6.0 0.1 5.4
.... .. ..... .... ...... .... ... --- ... --- ... ---
14e Cost
Total 2,101.5 21,589.6 1,214.0 526.8 6,914.1 91.2 119.6 53.1 24.3 361.0
.............. ---- --- --- ... --- -- ---- .... ---- .... ....
6.hpiwcal Comtiegeaosiu 102.3 123.9 63.1 26.3 316.2 4.1 5.7 2.9 1.2 14.6
t. trlie Ctoaitgemoisa 405.7 199.6 344.1 141.1 1,697.1 16.1 36.9 15.5 6.1 11.4
------------ ----- ...... ...... ..... ..... ..... ... .. . ... ..
TOTAL COSt
mmOJICT 2,612.53,513.1 1,632.4 700.0 1,508.0 120.1 162.3 77.1 32.3 313.1
T?as 1,11l.6 1.397:1 751.1 3,321.3 54.3 64.6 31.8 0.0 153.7
1oreigkcbage 1,135.0 1,3714.4 835.2 99.4 3,494.0 52.4 63.5 40.9 4.6 111.1
1/ Izhebme
nrt: 21.?.h/ItS
3owe.ber3. 1,9
w
PAKISTAN
TRANSIMSSION EXTENSIONAND REINFORCEMENTPROJECT
HPC - Jamshoro 500 KV TransmwlaslonLines (LUh I & U)
nImplementation Schcdul
_ 1989 1990 199&1 1992 19.
STEEL TOWERS T
CONDOUCTOR.
S#eLWWM a
ASCESSORES& NPO I
GENERALFELD EQUFKGEtdT.
LIE COE4STMRJCTIO
a SOE SSININ LIE
ILTNA
LI
TERNJAnmASHORO)
AOCA.TIC
GMalW
INVESTIi!i:ION H E l1
PRCFIEIDEN T j 68A$ MM tl I ___ _1_ FI 1
-LTA GATTIW
TOWWERO
SOOTEE
I_ 11VI1Y
LIE IOOF lllllllSFl. I SIRT FOWQ11ON
GENRA t
FEW QlOCI ET AW 8EPE I _F
ANNEX 3.4
PAKISTA^N
TRANMISSIONEXTENSIONANDREINFORCEMENT
PROJECT
1990
June 30, 1990 2.6 2.6 1.6
1991
December 31, 1990 9.6 12.2 7.5
June 30, 1991 14.0 26.2 16.2
1992
December 31, 1991 17.0 43.2 26.7
June 30, 1992 23.0 66.2 41.0
1993
December 31, 1992 21.0 87.2 54.0
June 30, 1993 22.0 109.2 67.4
1994
December 31, 1993 22.0 131.2 81.0
June 30,1994 14.8 146.0 90.0
1995
December 31, 1994 8.0 154.0 95.0
June 30, 1995 8.0 162.0 100.0
PAKISTAN
EXTENSION
TRANSMISSION PROJECT
ANDREINFORCEPENT
ANDPOWER
WATER AUTHORITY
DEVELOPMENT
ACTUALANDFORECAST STATEMENT
INCOME
............ ................................
(RUPEES MILLION)
(Unaud) -.........................
Actual----------
---------- -.................-------
FORECAST
FY85 FY86 FY87 FY88 FY89 FY90 FY91 FY92 FY93 FY94 FY95 FY96 FY97 FY98 ----.. ... ..... ........ ....... ..... .........
----. ...... ..... ---- ----. ---- ----. ----
.... ---- .---- ----. ----
18780 21055 23630 27451 29084 33806 33711 37718 43919 51208 54824 60004 66950 73972
KWh GENERATED(MILLIONS)
13756 15504 17745 20702 22221 26030 25957 29043 33818 39430 42214 46203 51552 56958
KUh SOLD(MILLIONS) 77 77 77
Klh SOLD/KWhGENERATEDCX) 73 74 75 75 76 77 77 77 77 77 77
SOLD(PAISA) 63.83 74.39 69.61 82.89 93.6 112.8 120.5 129.0 151.9 166.8 174.0 187.6 185.6 187.5
AVE. REVENUE/KWh 4.3 7.8 -1.1 1.0
X INCREASEIN AVE. REVENUE 1.7 16.6 -6.4 19.1 12.9 20.4 6.9 7.0 17.7 9.8
SOLDCPAISA) 52.9 57.6 55.4 59.9 67.6 77.7 89.3 90.2 103.2 113.0 114.1 121.6 121.6 121.6
AVE. TARIFF/Kih -0.0 -0.0
IN AVE. TARIFF -0.5 8.8 -3.7 8.1 12.8 15.0 14.9 0.9 14.4 9.6 0.9 6.6
X INCREASE
(RS MILLION)
REVENUE
OPERATING
.... ....... .... ... ......
SALESOF ELECTRICITY 7280 8925 9836 12406 15021 20236 23192 26192 34886 44565 48163 56199 62705 69282
FUELS2RCHARGE 1500 2609 2517 4753 5782 9116 8094 11276 16475 21206 25307 30500 32962 37517
REVENUES
OPERATING 212 226 235 464 511 562 618 680 748 823 905 996 1095 1205
OTHER ............... .... .. .. .. . ....... ....... .......
.... ..... .... .... .. .. ... .........
REVENUES
TOTALOPERATING 8992 11760 12588 17623 21314 29914 31905 38148 52109 66594 74376 87696 96762108003
MILLION)
EXPENSES(RS
OPERATING
.................. ............................
OF POWER(w/oFuel) 491 388 143 91 8 0 0 374 4466 6873 7202 7391 7626 7861
PURCHASE 31347 33876 38558
FUELCOST 2406 3200 3714 5465 6300 9116 8319 11589 16932 21794 26010
708 769 872 1037 1230 1834 2147 2479 2868 3365 3975 4721 5587 3021
MAINTENANCE
& ADMINISTRATION 1758 2096 2370 3100 3169 3644 4191 5029 5784 6651 7649 9179 10555 12139
OPERATION 6198 7322 8696 10292
DEPRECIATION 1110 1363 1701 2039 2406 2847 3379 3955 4566 5284
........... ....................... ....
..........
.....................................
.... .................. . ..........
.................................
EXPENSES
TOTALOPERATING 6473 7816 8800 11732 13113 17442 18035 23426 34616 43966 51033 59958 66340 71870
INCOME
NETOPERATING 2519 3944 3788 5891 8201 12472 13869 14722 17493 22627 23342 27737 30422 36133
210 206 333 182 200 220 242 266 293 322 355 390 429 472
INCOME
OTHER
FOR FIXED 2729
NET INCOMEAVAILABLE 4150 4121 607 8401 12693 14111 14989 17786 22950 23697 28127 308S1 36605
CHARGES
FIXEDCHARGES
.... .........
INTEREST 1897 2302 3171 3948 5386 6413 7016 7256 7310 7560 8520 9593 10703 11783
CHARGEDCONSTN. 273
LESS:INTEREST 385 647 713 1399 1915 1811 1981 2097 2478 3168 3888 4751 5504
CHARGEDOPERATIONS
INTEREST 1624 1917 2524 3235 3987 4498 5204 5274 5213 5082 5352 5705 5952 6279
INCOME 1105 2233 1597 2838 4414 8195 8907 9714 12573 17868 18345 22422 24898 30326
20 20 20 20 20 20 20 20 20 20 20 20 20
TOGOVERNMENT 20
LESS:PAYMENT x
....... ....
........... ....... ............. ........ ........... ............................................................
NETPROFIT 1085 2213 1577 2818 4394 8175 8887 9694 12553 17848 18325 22402 24878 30306
.h F
ONFIXEDASSETS
RATEOF RETURN -I
...... C V..........ALD 12.___
VALUED
HISTORICALLY 12.0 14.8 11.5 14.4 17.3 22.0 20.7 18.9 19.6 22.0 19.4 19.4 17.7 17.7
PAKISTAN
EXTENSION
TRANSMISSION PROJECT
ANDREINFORCEMENT
WATERANDPOWER AUTHORITY
DEVELOPMENT
ACTUAL BALANCE
ANDFORECAST SHEET
............................................................. .............
(RupeesMillion)
FIXEDASSETS
............
IN OPERATION
FIXEDASSETS 34288 43531 54723 62238 74088 88609104453121534139373162555191610226790270119 317990
RESERVE
LESS:DEPRECIATION 7817 9171 10928 12965 15371 18218 21597 25552 30117 35401 41599 48921 57617 67909
26471 34360 43795 49273 58717 70390 82856 95983 109255127154150011177S69212502250081
IN OPERATION
NETFIXEDASSETS
WORKIN PROGRESS 10181 10062 9389 14184 17775 21009 23388 25167 26235 34508 43144 52153 64297 70611
.... ...... .................... ..................................
.........
.....
......
_.. ...........
................. ...............................
ASSETS
CURRENT
..............
CASH 433 504 470 775 2006 1678 1686 2239 3456 4448 5156 6053 6629 7082
INVENTORIES 1895 2092 3135 3957 3704 3987 5223 6077 6969 8128 9581 11339 13506 15899
RECEIVABLE
ACCOUNTS 1770 2270 2502 2858 3873 565 5424 64?5 8859 11321 12644 14908 16450 18361
WATERWINGACCOUNTS 304 311 284 496 .521 547 574 603 633 665 698 733 770 808
OTHER ASSETS
CURRENT 1459 847 1018 2267 2516 2831 3184 3582 4030 4534 5101 5738 6456 7262
....................................................................................................................... _ _ _......
_ .................................................................................
ASSETS
TOTALCURRENT 5861 6024 7409 10353 12620 14129 16091 18987 23946 29096 33179 38M 43810 49412 b
.....................................................................................................
.......... ................................................. _
.. ,,....................................
,.......
........ ..............
TOTALASSETS 42513 50446 60593 73810 89112 105529122335140137159437190758226334268793320608370104
CAPITALANDLIABILITIES
EQUITY
INVESTMENT
GOVERNMENT 2437 2437 2437 2437 2437 2437 2437' 2437 2437 2437 2437 2437 2437 2437
2901 3304
EQUITYCONTRIBUTION
GOVERNMENT 3574 3813 3813 3813 3813 -813 3813 3813 3813 3813 3813 3813
CAPITALCONTRIBUTION 2027 2750 3781 4907 6204 7666 9269 11030 12961 15079 17403 19952 22748 25813
RETAINEDEARNINGS 11632 13760 15319 17952 22346 30521 39408 49102 61655 79503 97828 120230145109175415
.............................................. ........................................
_.......... ......... .....................
TOTALEQUITY 18997 22251 25111 29109 34800 44436 54927 66381 808S5100832121481146433174106r'7477
LONG TERMDEBT 20349 24740 31412 38457 47400 53424 58787 63795 66431 78422 91893 107468129818143952
DEPOSITS
CONSUMER 299 325 358 395 494 568 653 751 864 994 1143 1314 1511 1738
ACCRUED
INTEREST 1034 1117 1200 1283 1366 1449 1532 1615 1698 1781 1864 1947 2030 2113
LIABILITIES
CURRENT 1834 2013 2512 4566 5052 5651 6436 7595 9579 8729 9954 11632 13143 14824
.............. ........... .......... ................... ............................................
ANDLIABILITIES 42513 50445 60593 73810 89112 105528122335140136159436190757226334268793320608370104
TOTALCAPITAL
DEBTAS% OFDEBT+EOUITY 52 53 56 57 58 55 52 49 45 44 43 42 43 41 0
>
.
AS% OF DEBT+EQUITY
EQUJITY 48 47 44 43 42 45 48 51 55 56 57 58 57 59 ,,
PAKISTAN
EXTENSION
TRANSHISSION PROJECT
AND REINFORCEMENT
WATERANDPOWER AUTHORITY
DEVELOPMENT
ACTUAL SOURCES
ANDFORECAST ANDUSESOr FUNDS
.....
__.............................. ..... ......... ___
NILLION)
(RUPEES
FORECAST---------------------------
Actual---------(UnaU) --------------------------.
----------
OF FUNDS
SOURCES FY85 FY86 FY87 FY88 FY89 FY90 FY91 FY92 FY93 FY94 FY95 FY96 FY97 FY98 . ..... ..._.. ....... .... ..... .... .....
...... .... ......... .... ..... .... .....
..... ....... ...... .... ..... ....
FROM
FUNDS OPERATIONS
2729
FORFIXEDCHARGES
NETINCOME 4150 4121 6073 8401 12693 14111 14989 17786 22950 23697 28127 30851 36605
DEPRECIATION 1110 1422 1764 2126 2406 2847 3379 3955 4566 5284 6198 7322 8696 10292 _
............................................ ...................................
__.............. .....................
SUBTOTALFUNDSFROM 3839
OPERATIONS 5572 5885 8199 10807 15540 17490 18943 22352 28234 29895 35449 39547 46897
403 274 0 0 0 0 0 0 0 U 0 0 0
GOVERNMENTGRANT
CAPITALCONTRIBUTIONS 449 723 1030 1126 1297 1462 1604 1760 1931 2119 2324 2549 2795 3065
24 26 33 37 99 74 85 98 113 130 149 171 197 227
SECURITYDEPOSITS
BORROWINGS
RUPEE LOANS 2115 2547 3628 3361 5700 3665 2796 3838 3273 7671 7581 6168 7442 1846
FORCIGH LOANS 2854 2571 3991 4665 5000 5497 6561 6049 5466 10794 13463 18290 24495 22625
0 0 0 0 0 56 511 866 931 797 346 0 0 0
PROPOSED IBRDLOAN
BORROWINGS
SUBTOTAL 4969 5118 7619 8026 10700 9218 9868 10753 9670 19262 21391 24458 31937 24471 .__
._. .. .. .. .. .. .. .. .. . ..............................
.. ._. . ......... .... ._. ..
_._________. . .. ....... .... __..... .. ..
OF FUNDS
TOTALSOURCES 9281 11841 14841 17388 22903 26293 29047 31554 34066 49744 53759 62627 74476 74660
OF FUNDS
APPLICATIONS
_._......----... .
PROGRAM
CONSTRUCTION 0 0 0
PROJECT
PROPOSED 0 0 0 0 0 81 1032 2248 1824 2583 2258
CONSTRUCTION
OTHER 6768 8739 9872 11597 14042 15759 15380 14631 14985 26394 32265 40300 so57 48681 _._.
.............. ........... ..................... ............................................
........
6768
PROGRAM
CONSTRUCTION
SUBTOTAL 8739 9872 11597 14042 15840 16412 16879 16809 28977 34523 40300 507M 48681
DEBTSERVICE
INTEREST 1897 2302 3171 3948 5386 6413 7016 756 7310 7560 8520 9593 10703 11783
83 83 83 83 83 83 83 83 83 83 83 83 83 83
ACCRUED
LESS:INTEREST
AMORTIZATION 599 725 919 981 1757 3194 4505 5745 7034 7270 7920 8882 9587 10337
_.......... .......
.... ...... _.__.... __.... .............. .............................
.,... ........ .................
DEBTSERVICE
SUBTOTAL 2413 2944 4007 4846 7060 9524 11438 12917 14261 14747 16357 18392 20208 22037
20 P0 20 20 20 20 20 20 20 20 20 20 20 20
TO GOVERVNENT
PAYMENT
CHANGE CAPITAL
IN WORKING 576 452
-68 71 -34 305 1231 -328 7 554 1217 993 708 897
CASH 2950 3469
OTHERTHANCASH 149 67 976 620 550 1237 1170 1184 1759 5007 2151 3018
CAPITAL 81 138 942 925 1781 909 1177 1738 2976 5999 2858 3915 3526 3922
IN WORKING
NETCHANGE ... .. __......................................................................
....
...
................. .........................
OF FUNDS
TOTALAPPLICATIONS 9282 11841 14841 17388 22903 26293 29047 31554 34066 49744 53759 62627 74476 74660
1.7 1.5 1.6 1.5 1.5 1.6 1.9 1.8 1.9 2.0 2.1 a
DEBTSERVICECOVERAGERATIO 1.6 1.9 1.5
44.7 33.1 40.8 40.0 40.0 40.0 40.0 40.0 40.0 41.6 49.6 .
RkTIO-3 Yr. AVE 36.6
SELF FINANCING 50.0 34.5
-47- Page 4 of 7
PAKISTAN
TRANSHISSIONEXTENSIONAID REINFORCEMENT
PROJECT
WATERAND POWERDEVELOPMENT AUTHORITY
NOTES ANDASSUMPTIONSFOR FINANCIALFORECASTS
Income Statement
Salesof Electricity
1. The forecast sale of electricityis based on projected generation from
WAPDA's plants presented in Annex 4.1, together with purchases from private
sector power plants as follows:
FY90 FY91 FY92 FYn9 FY94 nY95 FY96 FY97 FY98
Private Sector Gen. (GME) 0 0 490 5421 7885 7885 7885 7885 7885
Fuel Cost (Res HlUozn) 0 0 290 3464 5330 5586 5732 5914 6097
0GI Debt Service and ROE
Costs (Rs tllion) 0 0 375 4466 6873 7202 7390 7626 7861
Total Power Purch.Cost (Ra M) 0 0 665 7930 12203 12788 13122 13540 13958
Details of WAPDA's power purchases from the Private Sector are shown in Annex
4.1, page 7.
Other ODeratingRevenue
Fuel Cost
MaintenanceExpenses
a: income
-48- Anx A.
Page 5 of 7
Other Income
Payment to Government
BALANCE SHEET
Cash
Inventories
AccountsReceivables
Current Liabilities
a: tncw-e
Amex 4.1
Page 6 of 7
SecurityDeDosits
Capital Contributions
! a: Inco
PAKISTAN
TRANSMISSIONEXTENSION
ANDREINFORCEMENTPROJECT
WATERAND POWERDEVELOPMENT
AUTHORITY
ESTIMATEDENERGYPURCHASESFROMPRIVATESECTOR
FY89 FY90 FY91 FY92 FY93 FY94 FY95 FY96 FY97 FY98
Inflation Estimates 12.00Q 10.00Q 8.00X 7.002 6.50X 6.50X 6.50X 6.502 6.50X 6.502
Escalation Factors 1.18 1.24 1.28 1.38 1.46 1.53 1.57 1.62 1.67
Generation
Nab River Complex 0 0 392 4337 6308 6308 6308 6308 6308
FauJi Fourdation 0 0 98 1084 1577 1577 1577 1S77 1577
, ... ... .... . .... ...................... .......
Tariffs (NominalRs)
Nab River complex 1.25 1.31 1.36 1.46 1.55 1.62 1.66 1.72 1.77
Fauji Fourdation 1.25 1.31 1.36 1.46 1.55 1.62 1.66 1.72 1.77
Fuel Costs/kWh (Nominal Rs) 0.546 0.574 0.593 0.639 0.676 0.708 0.727 0.750 0.773
Nab River Complex 0.546 0.574 0.593 0.639 0.676 0.708 0.727 0.750 o.m
Fauji Foundation
Total Fuel Costs 0 0 290 3464 5330 5586 5732 5914 6097
Generation FY89 FY90 FY91 FY92 FY93 FY94 FY95 FY96 FY97 FY98
....... .............. .... . ...... .... . ...... .... . ...... .... . ...... .... . ...... ...........
..............
..
ongofng Investments
GudxuCC 83 272 0 0 0 0 0 0 0 0
uzuaffararh (1 - 3) 781 2239 1400 1800 2000 0 0 0 0 0
Muzaffargarh (4 - 6 0 0 0 0 0 1000 2050 3000 4000 2358
Kot Addu Ccmb. Tur. (5 - 8) 1243 366 0 0 0 0 0 0 0 0
Kot AdckaCC (9 &10) 1178 1086 500 294 0 0 0 0 0 0
Kot Adau CC (11 &12) 0 0 0 0 0 1000 1000 1000 1500 360
Jaashoro Olt 1 1174 1139 264 0 0 0 0 0 0 0
Jaishoro II-IY 129N 2175 1337 1006 27n 0 0 0 0 0
GSlgit Diesel Sets 15 10 1 0 0 0 0 0 0 0
GudduCC 0 160 1200 500 400 0 0 0 0 0
Thenal Rehab. 465 385 800 311 0 0 0 0 0 0
Iaport. Coal Engr. 10 22 0 0 0 0 0 0 0 0
Centr. Test Lab. 25 12 32 0 0 0 0 0 0 0
Tarbela 11-14 993 1480 1400 1900 2200 802 0 0 0 0 1
mangla 9 & 10 64 180 150 350 560 0 0 0 0 0 Un
P& Low Nead Nydel 30 9 0 0 0 0 0 0 0 0 F
ev. of Hirpur 25 5 0 0 0 0 0 0 0 0
..... ..... _.. ..... ...... ..... ..... ..... ..... .....
Stbtotal (Ongoing) 7381 9540 7084 6161 5432 2802 3050 4000 5500 2718
UM JnfestnAefts
Coal F.B. 120 160 800 900 330 0 0 0 0 0
Lakhra Coal F.B. t4 - 6) 0 0 0 0 0 105 500 1000 1500 295
Lakhra Coal F.B. C7 - 9) 0 0 0 0 0 790 1500 2000 2600 760
Jamh. 5-7 Engr. 0 7 0 20 32 0 0 0 0 0
Iworted Coal (Unit 1) 0 0 0 0 0 1258 2358 3000 3530 2247
1I orted Coo (tUnit 2) 0 0 0 0 0 1700 2500 3000 4000 2281
Iwported Coal (Unit 3) 0 0 0 0 0 1000 2000 2400 3200 6162
iqported Coat (Unft 4) 0 0 0 0 0 1000 1500 2400 3200 5081
Imported Coal (Unit 5) 0 0 0 0 0 0 500 1000 2500 4481
imported Coal (Unft 6) 0 0 0 0 0 0 0 0 1000 3581
Sorida (Unit 1) 0 0 0 0 0 2900 3500 3800 835 0
Others 0 88 0 610 870 0 0 0 0 0
Chasins 30 30 250 550 1050 477 0 0 0 0
BashaEngfneering 8 35 50 100 700 232 0 0 0 0
Gaz Ghar. Engr. 10 15 40 70 90 21 0 0 0 0
Chazf Ghar. (Units 1-2) 0 0 0 50 100 1332 2300 2400 4820 8157
Ghaz Ghar. (Units3-4) 0 0 0 0 0 0 0 900 1000 2681
Taunisa 8 0 50 100 300 1700 1700 1800 587 0 Fdt1
Jinnab 0 0 0 100 500 1250 1450 1800 3000 742 o00
SthtotaL mv.)176
335 Noa190 2500 972 1376 19808 2500 31772 36468 p.
Total (Generation) 7557 9875 8274 8661 9404 16567 22858 29500 37272 39186
== mS; === == ~sX === c== E=S U-SX St5;
PAKISTAN
TRANSMISSION
EXTENSIONANDREINFORCEMENT
PROJECT
WATERANDPOWER DEVELOPMENT
AUTHORITY
CAPITALEXPEIIDITURE
PROGRAM
FY89- FY98
.....
........ ................ _................ ........
(RS NILLION)
Traumlssion FY89 FY90 FY91 FY92 FY93 FY94, FY9 FY9 FY97 FY96
............ .... . .....
.... ....... . ..... .... .... . .... .... . ..... ... .....................
OngoingInvestmnt
F/abud-Mutt-Kar.chf 95 0 0 0 0 0 0 0 0 0
Tarbeta-Falstldbed 3 0 0 0 0 0 0 0 0 0
Fafselabad-Sahhigt I 1 0 0 0 0 0 0 0 0
MerdmnPbamer 39 177 125 0 0 0 .0 0 0 0
Dack-Khudmr 96 100 230 0 0 0 0 0 0 0
Nodor.DeepatchiCan. 398 250 200 182 0 0 0 0 0 0
A.C Network Nodern. 22 8 0 0 0 0 0 0 0 0
Tarbeta-Lahore 91 400 400 282 0 0 0 0 0 0
Lahore-Jinmhoro 1228 1312 500 1000 668 0 0 0 0 0
..... ..... . ..... ..... ..... . ...... ..... . ...... ...... ...........................
NewIn estient
Trm PC I1 41 0 58 0 0 0 0 0 0 0
Lsdmmla-Dadi.le 0 2 600 138 0 0 0 0 0 0
Ptmn. St. (PC-11) 9 0 0 0 0 0 0 0 0 0
Guda-sibi-ltta 4 80 400 136 0 0 0 0 0 0 1
T/L Losd I tels. 0 0 0 0 70 225 175 0 0 0 U
Karachl-Jamboro 0 0 500 300 142 0 0 0 0 0
Jdhboro-mult.n 0 0 600 1000 400 0 0 0 0 0
Nuttn-Labore 0 0 0 0 300 0 0 0 0 0
m tffarghar-Nut'ton 0 0 50 60 35 0 0 0 0 0
muaffarfrar-Nultan 0 0 75 20 0 0 0 0 0 0
Sande 0 0 0 0 0 300 400 400 100 0
2ndSOOKV Leor-Nultan 0 0 0 0 0 700 0 0 0 0
Kot Addu-Lorslai 0 0 100 200 240 0 0 0 0 0
1stSOOKV Kot Addu - Lorela 0 0 0 0 0 1100 1250 100 0 0
3rd SO0v Dau-mNuttUn 0 0 0 0 0 500 600 900 1600 250
Lakhra-Dadu 0 0 0 0 0 150 300 400 75 0
Ludmista-Gatti 0 0 0 0 0 100 300 300 400 100
Ludemia-Daudkhel 0 0 0 0 0 75 150 150 250 50
Peshaw.r-G Gharfate 0 0 0 0 0 0 0 200 400 700
SOKV 2nd C. Tarbeta-Lahore 0 0 0 0 0 0 0 400 900 1400
Chass-iulttan 0 0 0 0 0 0 0 0 400 600
Basha-Rmaat 0 0 0 0 0 0 0 0 0 500
Guddu-Sibbi 0 0 0 0 0 150 300 400 700 100
Tarbela-Rewat-Lahore 0 0 0 0 0 175 200 200 0 0
muttan-Gudmu 0 0 0 0 0 100 300 500 750 250
KoLabsch-multtn 0 0 0 0 0 100 450 800 1000 250
Daudchal-Kalabegh 0 0 0 0 0 2S 100 200 125 50
2nd 200KVKatabogh-Kchat 0 0 0 0 0 25 100 200 400 9f DI
2nd 220KVKot Addu-Loratal 0 0 0 0 0 10 40 150 250 50 OF i
SOOKVtine to Dadu 0 0 0 0 0 400 800 1200 1600 400 0
Tarbtela -Gattf 0 0 0 0 0 375 0 0 0 0 'J
Others 0 61 0 0 0 0 0 0 0 0 O
Sub-total (New Irw.) 54 143 2383 1854 1187 4S10 5465 6500 89S0 47947
... ........ . .... ... .... ... .... .... .... ...... ..... .... ....
Total (Transr ssion) 2027 2391 3838 3318 1855 4510 5465 6500 8950 4795
U~ 3f _3~ 22 U3 Uu U:3 3U33
PAKISTAN
TRANSNISSIONEXTENSIONAND REINFORCEMENTPROJECT
WATER AND POWER DEVELOPMENTAUTHORITY
CAPITAL EXPENDITURE FY89 - FY98
PROGRAM
................................................
(RS MILLION)
Suory
9404 16567 22858 29500 3727 39186
7557 9875 8274 8661
Generstion 1855 4510 5465 6500 8950 4795
2027 2391 3838 3318
Trafmission 2200 3500 3100 2700 2800 2900
1560 1574 1800 2000
Sec. T/L & Grid Stn. 2000 2200 200 200 200 200 200
1237 1238 1800
Rural Electr. 800 4200 2900 1400 1500 1600
1299 340 600 700
Distrib. of Power 350 0 0 0 0 0
8 400 100 200
Loss Reduct.& Ld. Mgt. 0 0 0 0 0 0 0
Rehab. 354 0 0 0
Distribution 0 0 0 0 0 0
0 22 0
Others .. ..... ... ... ..... ..... ..... ..... ..... .....
I*l
PAKISTAN
TRANSMISSIONEXTENSIONAND REINFORCEMENT
PROJECT
WATERANDPOWER DEVELOPMENTAUTHORITY
GENERATION FORECAST
................................................
(Gwh)
Thermat Generatfon
...... ...........
Power Station FY89 FY90 FY91 FY92 FY93 FY94 FY95 FY96 FY97 FY98
,.................. .... .... . ...... .... . ...... .... . ...... .... . ...... ...... ..............
..............
..
Gutdu 3671 3418 3599 3290 2861 3063 3193 3499 3395 2975
Nultan 760 1255 605 872 815 915 942 1023 931 905
SPS Faisatlbad 664 706 640 543 421 460 475 512 463 450
GTPS FaisaLabod 632 776 283 112 16 12 12 22 12 12
Sukkur 249 266 176 149 115 125 129 139 126 125
Hyderabad 149 175 61 51 41 40 41 45 43 43
Kotri 361 573 156 54 1 0 1 4 0 1
Shahdara 129 62 87 48 11 12 12 17 12 12
Quetta 388 398 135 90 51 52 53 61 55 55
REPCO/NESCO 91 84 61 51 41 40 41 45 43 43
ImportedCoat 0 0 0 0 g0 0 0 0 747 5166
Guddu GT 2504 0 0 86 22 0 0 0 0 0
Kot Addu GT 1672 1806 616 323 66 27 0 0 0 0
Guddu CS 1098 4240 3471 3164 3686 4516 4707 5157 5019 4399
Jaeshoro oil 0 3156 3107 4130 3263 3537 3661 3965 3602 3492
Kot Addu CS 0 591 3784 3136 2733 4684 6271 6655 6474 5678
Faisalabed CS 0 0 0 523 691 735 766 837 817 716
Kotri CS 0 0 0 469 539 735 766 837 817 716
Lakhra Coat 0 0 0 22 520 781 1345 1647 2659 2465
Muzaffargarh 0 0 836 2887 3356 2496 3188 5698 5086 4933
Sands Coal 0 0 0 0 0 0 0 245 1388 1232
..... ..... . ...... ..... . ...... ..... . ...... ..... . ...... ...........
........................
Subtotal Thermal 12368 17506 17617 20000 19249 22230 25603 30408 31689 33418
Hydel ion
oenerat
................
Tarbela 9826 9471 9357 10119 11880 12845 13028 12930 13037 13149
Mangle 5648 5393 4934 5306 5589 5685 5727 5727 5727 5722
Warsak 733 931 1270 1270 1234 1259 1270 1270 1270 1269
Sall Hydel 49; 505 533 533 521 530 533 533 533 533
Chastma 0 0 0 0 25 774 778 780 775 773
T unsa 0 0 0 0 0 0 0 471 479 479
Jinnah 0 0 0 0 0 0 0 0 546 500
Kalabi 0 0 0 0 0 0 0 0 5009 9139
Gazi Gharfyala 0 0 0 0 0 0 0 0 0 1105
..... ..... . ...... ..... . ...... ..... . ...... .............................................
Subtotal Hydet 16700 16300 16094 17228 19249 21093 21336 21711 27376 32669
0e
Iports (Xenel/Hspel) 851 4318 6308 6308 6308 6308 6308
CNandpur/Panjpir) 214 478 520 520 520 520 520
..... ....... ..... ..... ..... ..... ..... ..... ..... ..... . 0
Total Generation 29068 33806 33711 38293 43294 50151 53767 58947 65893 72915
.3=3= 3c=3 c==3= c=33 ccc3 c3=3 ===c3 3cc3 c=3 =3cc=
AUTHORITY(WAPDA)
WATERAND POWER DEVELOPMENT
- FINANCE (POWER)
ORGANIZATIONCHARTOF GENERALMANAGER
ID (a I
POWER}
SI igi
01 05.1
SN.? iwuil ~ ~ I s-n
I
.~~~~~~~~~~~~ I*s
*5*0.tlff 5
5tPS1
I I S = Amon
I lM" O qIMIIAu
AS
F-Af I 1* CGs=UAIS ICI , I&WMMli SS II I ._
Al.INS. *t4AIs. oil,,1.. .
-1ft% I* I
_su._.! 2
.e1r S_La l_ .
-56-
ANNEX 5.1
Page 1 of 6
PAKISTANI
TRNMISSIONEXTESION AnD REINOCEETPROJECT
Costs
1. Capital Costs: Investmentexpendituresincurred by WAPDA on its generation,
transmission
and distribution
developmentprogramandby the privatesectorduringtheperiod
is presentedin Attachment1.
FY90-95. Detailsrelatingto the phasingof expenditures
2. Local Costs: These are expressedin equivalentborder prices using the following
conversionfactors: capitalgoodsat 0.81 of theirdomesticprices;and labor at 0.77 of
the domesticwage rate.
3. AnnualOperation-andMaintenanceCosts(O&M): Theseare estimatedat 3X of thecapital
costsassociatedwith the investmentexpenditures
incurredby both VAPDA and PS.
4. Incremental Fuel Costsassociatedwith the incremental
generationwere valued on the
followingborder prices:
June 1989 BorderPrices(CIF)
! Stlxl-lvFu
Dl
e USS/TOE
Fuel Oil 77.3
Diesel 169.7
Coal 50.0
Gas 77.3
Detailsrelatingto fuel consumption
are presentedin Attachment2.
Benefits
5. Two cases were considered: Case 1: takes the averagerevenueof Rs 1.07/kWhas a
proxy for the consumers'willingnessto pay; and Case 2: takes into accountthe projected
annualincreasein revenuesof 1.8X in real termsrequiredto achievea self-financing ratio
of 402 for VAPDA whichresultsin an estimatedconsumers'willingnessto pay of Rs 1.3/kWh.
0: \wSpOX iui.|*n\er,5-
Case 1
PAKISTAN
t
PREVAILING TAR FF LEVELS TRANSMISSION
EXTENSION
ANDREINFORCEMENT
PROJECT
AT CONSTANT FY90AVG. REV. WATERANDPOWER
DEVELOPMENTAUTHORITY
...---------............... INTERNAL
ECONOMIC
RATEOF RETURN
.... ........ _.......... .................... .......
CONSTANT
(1989) INVESTMENTS
(Re Nil.) 1/
.....................................
PUBLICSECTOR 12148 11660 10809 10160 7419 11940 --- ... ...
PRIVATESECTOR 4783 7255 7252 10094 10608 11149 --- ... ...
- - . . . .......
..... ----- ..... ..... --- ... ......
TOTAL 16930 18916 18061 20254 18028 23090 --- --- ...
CONSTANT
(1989) PRICES(Rs Mil.)
.............. ....................... _........._...
TOTALINVESTMENT
COSTS 16930 18916 18061 20254 18028 23090 --- --- ...
LOCALCOSTS 6999 6108 5691 5782 5603 6689 --- --. ---
MATERIAL 5249 4581 4269 4336 4202 5017 - --- .---
SKILLEDLABR 350 305 285 289 280 334 --- ... ---
tISKILLEDLABOR 1400 1222 1138 1156 1121 1338 ... ... ...
FOREIGNCOSTS 9931 12808 12370 14472 12425 16400 --- .. .
IN U0RDER(1989) PRICES(Re Nil.) 2/ VI
...................... ............................... __..
TOTALINVESTMENT
COSTS 15979 18085 17287 19467 17266 22180 --- -- -.-.
LOCALCOSTS 6047 5277 4917 4996 4841 S780 --- ... ...
MATERIAL 4462 3894 3528 3686 3Sr72 4iMb --- -- -.--
SKILLED LABOR 339 296 276 280 272 324 --- --- -..
iNSKILLED LABOR 1246 1087 1013 1029 997 1191 --- --- ...
FOREIGNCOSTS 9931 12808 12370 14472 12425 16400 --- ---
.-.
ECONONIC
COSTS(RsNiL.)
.........................
TOTALINVESTMENT
COSTS 15979 18085 17287 19467 17266 22180 --- ... ...
O & N COSTS 479 1022 1541 2125 2643 3308 3308 3308 3308
FIEL COSTS 1842 3028 4507 7431 11652 13590 15896 18202 205O8
,,,,....... ....... ....... __....... ..... ....... ..... ....... .... ....
TOTALCOSTS 18300 22135 23335 29023 31560 39078 19204 21510 23816
AVERAGEREVENUE/kJh
(CONSTANT
Re. 1.07 1.07 1.07 1.07 1.07 1.07 1.07 1.07 1.07
INCREMENTAL
SALES(MILLIONkWh) 3809 3905 7648 11765 16395 19180 23168 28517 33924
TOTALKENEFITS(RSNit.) 4092 4195 8216 12639 17613 20605 24889 30635 36444
NET BENEFITS
INTERNAL
ECOMIC RATEOF RETU2N
-14208 -17940 -15119-16384 -13947 -18473 5685
BX
9125 12628
'a
ANDDUTIES
1/ NETOF TAXES U'
2/ CONIVERSION
FACTORS
- CAPITAL
GOCOS:
0.85; SKILLEDLABOR:0.97; UNSKILLED
LABOR:
0.89.
0'
PAKISTAN
EXTENSION
TRANSNISSION PROJECT
ANDREINFORCENENT
WATERANDPOWERDEVELOPMENTAUTHORITY
ECONOMIC
INTERNAL RATEOF RETURN
(6 Nil.)
(1989) INVESTMENTS
CONSTANT 1/
............. ......................... __.........
COSTS
TOTALINVESTMENT 16930 18916 18061 20254 18028 230 ---
LOCALCOSTS 6999 6108 5691 5782 5603 6689 --- -- ---
NATERIAL 5249 4581 4269 4336 4202 5017 --- --- ---
(R8 NiL.)
COSTS
ECONOMIC
.......... ................. _..._
COSTS
TOTALINVSTNENT 15979 18085 17287 19467 17266 22180 --- ...
0 & N COSTS 479 1022 1541 2125 2643 3308 3308 3308 3308
FUELCOSTS 1842 3028 4507 7431 11652 13590 15896 18202 20508
....... ..... ....... ..... ....... .....
_._.. .__.......
....... .....
TOTALCOSTS 18300 22135 23335 29023 31560 39078 19204 21510 23816
REVENUE/kWh
AVERAGE Re.)
(CONSTANT 1.07 1.20 1.29 1.30 1.30 1.30 1.30 1.30 1.30
SALES(MILLIONkWh)
INCREMENTAL 3809 3905 7648 11765 16395 19180 23168 28517 33924
(Rs Nil.)
TOTALBENEFITS 4076 4686 9866 15295 21314 24934 30118 37072 44101
NETBENEFITS -14224 -17449 -13469 -13728 -10247 -14144 10914 15562 20285
1/ NETOFTAXESANDDUTIES 1-'
- CAPITAL
FACTORS
2/ COWERSION LABOR:0.89.
GOODS:0.85; SKILLEDLABOR:0.97; UNSKILLED
08
_____ . *
PAKISTAN
EXTENSION
TRANSMISSION PRWECT
ANDREINFORCEMENT
WATERANDPOWER AUTHRItY
DEVELOPMENT
INTERNAL RATEOF RETULN
ECONOMIC
CALCULATIONS
NETINVESTMENT
CIP
WAMDA 10287 5553 15840 940 7072 16412 99t4 6915 16879 10412 6397 16809 9406 3439 12845 13294 O229 2S23 62703 37605 10030
0 0 0
Less: Taxes & Duties 3160 0 3160 3310 0 3310 3939 0 3939 3927 0 3927 2788 0 2788 4671 0 4671 21795 0 21795
..... ....... ..... ....... ..... ....... . ....... ..... ....... ..... ....... ..... ....... ..... ....... .....
-- ... ---- i;.
... ----- ......
Public Sector Net Inv. 7127 5553 12680 6030 7072 13102 6025 6915 12940 6485 6397 12882 6618 3439 10057 8M2 8229 16852 40908 37605 78513
Private Sector CIP 312 4736 5048 1104 7104 8208 i128 7561 86S9 1330 11342 12671 1463 12476 13938 1609 13723 15332 6945 561 636
Les: Taxes & Duties 90 0 90 146 0 146 155 0 155 226 0 226 249 0 249 274 0 274 1140 0 1140
..... ...... ........ ... ... ... ... ..... ...... ........ .. ... . ........ ..... ....... ..... ....... .... .... ..
..... ....... ........ ... ... ..... .......
Private Sector Net Inv. 222 4736 4958 958 7104 8062 973 7561 8534 1103 11342 12445 1214 12476 13690 1335 13723 15059 5805 56941 62746
~~~~~~~~~~~~~~.....
. i;;; ..... .......... ..... ... i -- -- -- . ..... ... .. ..... ..... ..... ..... ..... .....
Totat Net Investments 7349 10289 17638 6988 14176 21164 6996 14476 21474 7588 1739 2537 7132 15915 23747 9958 21952 31911 46713 9456 141259
D 15 :11M 1mnww *:= U21 =:tc arms_
n85- --- a# --- --- --- -_an =_=, #=, a---- m= MM=
.... ..... ___.... .. . .... ..... _..__ .. . ... . _ ..... ..... __-- ***_*_*__
, ____________ -- --
... ._ ..... . . . . . . . . . . . . . . . . . . . ..
Total Net Inrvestments 6999 9931 16930 6108 12808 18916 5691 12370 18061 5782 14472 20254 603 12425 18028 6689 16400 23090 3673 78406 115279
3.3=a 3= 3 3333 3 3 3 33 3
(1969 Prices) 333 3 3333 3 33 333 333333 3332 3
INETINVESTMENTS
(Constant (1989) Rs Nit.)
........................
PU2LIC SECTOR 6788 5360 12148 5271 6389 11660 4900 5909 10809 4941 5219 10160 4735 2685 7419 5793 6148 11940 32427 31710 64137
PtIVATE SECTOR 211 4571 4783 837 6418 7255 791 641 7252 841 9253 10094 U8 9740 10608 897 10253 11149 4446 46696 51142
..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... .....
-- ... .... ..... .....
TOTAL 6999 9931 16930 6108 12808 18916 5691 12370 18061 5782 1"472 20254 5603 12425 18028 6689 16400 23090 36873 406 115279
rt
ft
PAMISTAW
DEVELOPMENT
WATERAND POWER (WAPDA)
AUTHORITY
PROJECT
TRANSMISSION
PROJECTCOSTASSUMPTIONS
............................... ....................................... ......
Ft l
PAKISTAN
TRANSMISSIONEXTENSIONAND REINFORCEMENTPROJECT
UATER AND POUEROEVELOPMENTAUTHORITY
INTERNALECONOMICRATE OF RETURN
FUEL COST COMPUTATIONS
.
.. ........ ........................
.......................................
INCREMENTALCONSUMPTION
(TOE)
0 0 0 0 0 0 1 1 1
HSD 0 0 0
0 0 196 993 1451 0
FUEL OIL 1124 1124 1124
1107 708 685 680 958 954
GAS 394 394
-6 4 7 121 184 320 394
COAL
FUEL PRICES
(USV/TOE)
0 0 0 0 0 0 4 7 11
HSD 4408 4408 4408
0 0 327 1985 4408 4408
FUEL OIL 10379 12255 14132
1848 3030 4174 5310 6909 8502
GAS 680 1106 1531 1957
-6 -2 5 136 335 0
COAL .... .... .... ---- ---- ---
.... ---- ----
11652 13590 15896 18202 20508 a .
Totat 1842 3028 4507 7431
==== === =====- =
==== ==== ===
t===~~~~~~~~
.~~~~~~~~~~~~~~~~~~~~~~~~~~~.) 0
t ' LAHORERING U ssR /n N CHINA
-0 \
XYX'TiG RLANE POJCPAKISTAN
6- a .k_ , 0. . .......... .a
FAISALABAD RINGKAHI
r
CHINIOT G TTI MA NA
~NSATA6A C.,KLAAI
~~~
T. M. wt- ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ oo%
66 k
Ek OT LAKHIPAT
-- 9 0
0 D~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~0 POWER STATIAONS:
(b1
CONSTRUCTIONPOWPROTATION
b ~~~~~~~
~~~~~~k" P m~~XSTN
ORPLANNLECTOJIC
(0 5~~~~~~~~~~~~~~~~~~~~~~~~~~~--20k
--<I - ~~~~~~~~~~~~~~~~~~~~~
TERATIONALBONA: E
2 \ F YOJ 0 lEO~~~~~~~~~~~~~~~~~~~~~~~~~~
200 30ILkEEV
0~~~~~HUI020k
91~~~~~~~~~~~~~~~~~~~~~~~~~~~~~12k