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Cancellation of 93 LoIs for alternative power projects on the cards - Naveed Yaseen - 10-26-2008 07:47 AM
‘Firms’ lack of interest is causing disqualification’
* Law and order major reason for companies losing interest
By Atif Khan
ISLAMABAD: The government is set to cancel 93 letter of intent (LoIs) issued earlier to national and multinational companies to establish alternative energy power projects in the country, sources said on Saturday.
At this critical moment when the country is facing the worst energy crisis and experts stress alternative energy projects, the government is cancelling the LoIs.
It was learnt that the cancellation was expected shortly and all the firms issued that were issued LoIs would be disqualified. The sources said that the move was based on political motives, but Alternative Energy Development Board (AEDB) insists that the cancellation was due to lack of interest of firms.
“I have learnt from reliable sources that the cancellation is aimed to oblige political partners by granting them the land identified for the alternate energy generation projects,” a top official told Daily Times.
Out of the total 93 LoIs issued by the AEDB, 92 were meant for 50MW wind power projects each and one for a 5MW wind project.
For the wind project AEDB has identified 50,000 acres of government land in Sindh. 23,646 acres of land (19,807 acres in Gharo and 3,839 acres in Jhimpir) have so far been allocated to 15 investors, 10,330 acres of land was planned to provisionally allocate to seven more wind investors, AEDB sources said.
According to sources the cancellation would result in panic among local and international investors considering investing in the alternative energy resources of the country.
A top official criticising the cancellation said that alternative energy was the only solution to curb the prevailing energy crisis. He said that this cancellation would send a negative message to the national and multinational investors.
Commenting on cancellation due to lack of interest by the companies, he said that the major reason for the lack of interest was the law and order situation in the country.
He also commented that the local and international press exaggerated the law and order situation, which was the major reason for the lack of interest of investors.
He said that cancellation would send a message of inconsistency in the policies of the government, and the investors planning to invest in power sector would became reluctant after the cancellation of LoIs.
Another top official said that the government has failed to achieve any results from energy conservation campaigns and other energy conservation steps to meet the worst energy crisis that started in the country this year. Declaring alternative energy sources the only option he said that the only solution to prevailing energy crisis was to fully explore the potential of alternative energy resources.
The AEDB officials however said that the cancellation was due to the reason that despite issuance of LoIs most of the companies did not show any interest and failed to carry out initial work.
Interestingly, the target of AEDB is to develop 880 MW by year 2010 from wind energy for national grid without any investment from the government of Pakistan.
http://www.dailytimes.com.pk/default.asp?page=2008\10\26\story_26-10-2008_pg5_1