Pakistan and Iran are all set to discuss issues related to disruption in supply of electricity to Mekran Division and discrepancy in payment against 104-MW electricity being supplied by the Iranian side.

Pakistani team comprising chief secretary Balochistan, officials of the Power Division and the Ministry of Energy, Balochistan will attend a meeting scheduled on April 12, 2022 at Taftan with the Iranian authorities.

Following agenda items will be discussed with a view to review the progress on the decisions taken in a virtual meeting held on February 23, 2022 and to come up with a way forward.

The agenda items to be discussed during the meeting include: (i) fluctuation in the supply of existing 104MW electricity ;( ii) 220kV Polan-Gwadar Transmission Line Project ;( iii) 132kV Polan-Gabd Transmission Line Project; and (iv) energy payment issues.

Talking about fluctuation in the supply of existing 104-MW electricity, the sources said, there are variation between 20 to 70MW in supply from Iran, especially in peak summer months due to their internal issues. The Iranian side will ensure the maximum un-interrupted supply of electricity to Makran Division under the existing agreement.

Pakistan has nominated secretary Energy Balochistan as focal person and asked the Ministry of Foreign Affairs to communicate to Iranian side through diplomatic channel, while Iranian side has yet not shared the name of their focal person.

The agreement on 220kV Polan-Gwadar Transmission project for import of 100-MW was signed on February 7, 2007 between NTDC and M/s TAVANIR, Iran.

The length of transmission line in Pakistan area is approximately 75km and in Iran it is 51km. Iranian side has completed their part of transmission line and the NTDC has also acquired land for the construction of grid station at Gwadar.

As per contract agreement, the Export Development Bank of Iran (EDBI) has to finance 70 per cent of the total project cost and construction contract was awarded to M/s SUNIR, an Iranian company. The project got delayed due to sanctions on Iran.

The sources said that series of meeting were held with Iranian side to revive the project. M/s TAVANIR offered to finance the project through their receivables against existing supplies and to finalise the financing model with the EDBI. The financing model proposed by M/s TAVANIR is under discussion with Iranian side.

However, the project is yet to be revived.

The sources further stated that during the joint meeting on February 23, 2022 both sides agreed to the proposal shared by the Government of Balochistan for exploring the option of getting electricity supply through 132kV transmission line from Polan/ Gabd on Iranian side for prompt relief to the inhabitants of Makran Division as an interim agreement pending the completion of 220kV transmission line.

Under this proposal, the Power Division needs to construct 54km long double circuit 132kV transmission line from Iranian border to Gabd and Jiwani and re-conducting for second conductor up to Pasni which would be around 200km.

On February 23, 2022, it was decided at joint meeting that Iranian side will provide the details of Polan-Gwadar 110MW interim proposal (technical and financial model. M/s TAVNIR had conveyed in the meeting to share the technical and financial proposal and written commitment within a week time, but it has not yet been shared due to Nauroz holidays in Iran.

Pakistan will ask Iran to share both technical and financial proposals early so that Pakistani side may give its input and take necessary action for the approval of proposal from the relevant forum.

The Iranian side claims that receivables on account of electricity supplied to Pakistan stand at $66 million, while Pakistan side says they stand at $62 million. As per Iranian side against the monthly payment of $12 million as per decision, Pakistan is paying US dollars one million per month as a result of which the quantum of receivables is further ballooning.

The CPPA-G has shared statement of payment, according to which it paid around $48,316,093 in the last one year.

Further, it says that delay in the payment is caused due to the return of the cheques from the accounts designated by TAVANIR in Pakistan. The sources said, both M/s TAVANIR and the CPPA-G have been asked to reconcile their figures of payments made so far.

Both entities will come up with a financing model wherein the payment could be made easy and expeditiously. The CPPA-G will ensure the payment of both the current and the outstanding receivables as per arrangement agreed with TAVANIR.

The story was originally published in Business Recorder on April 11, 2022.