Project Management of a Power and Energy Company

Project Management of a Power and Energy Company TABLE OF CONTENTS PAKISTAN: AN OVERVIEW OF POWER SECTOR ............................................ 1 1.1 POWER SECTOR IN PAKISTAN ............................................... 1 1.2 INDICATIVE FORECASTED DEMAND AND SUPPLY .................. 2 1.3 MAIN PLAYERS OF PAKISTAN POWER SECTOR ...................... 3 1.4 OBJECTIVES OF POWER POLICY PAKISTAN ........................... 3 1.5 SCOPE OF POWER POLICY PAKISTAN .................................... 3 1.6 PROJECT PROCESSING FEATURES ........................................ 4 1.6.1 SOLICITED PROPOSALS ...................................................... 4 1.6.2 PROCESSING OF RAW SITE PROPOSALS ........................... 5 CHAPTER 2 ......................................................................................... 6 THE PROJECT NAME, SPECIFICATION ........................................................ 6 2.1 PROJECT NAME AND SPECIFICATION .................................... 6 2.2 THE PARENT COMPANY STRUCTURE ..................................... 7 2.3 HABIBULLAH GROUP DIRECTORS .......................................... 7 2.4 QUETTA POWER PROJECT: .................................................... 8 2.5 RESPONSIBILITIES OF DIRECTORS ....................................... 8 2.6 FUTURE ENDEAVORS: CAPACITY EXPANSION OF THE EXISTING 157 MW COMBINED CYCLE GAS POWER PLANT AT QUETTA ....................................................................................... 9 2.7 AFFILIATED COMPANIES HABIBULLAH GROUP ...................... 9 CHAPTER 3: ...................................................................................... 11 HYDEL POTENTIAL IN BALUCHISTAN ..................................................... 11 CHAPTER 4 ....................................................................................... 14 PROJECT TEAMS, CONTRACTORS AND SUB CONTRACTORS ............................. 14 3.1 ORGANIZATION CHART OF HEL PARENT COMPANY ............. 14 3.2 ALSTOM POWER EPC CONTRACTOR .................................... 15 3.3 ALSTOM EMPLOYEES BY REGION ........................................ 15 3.3 ALBARIO ENFINNERING LTD ................................................ 16 3.4 LIST OF FAMOUS PROJECTS PAKISTAN ............................... 16 3.5 ALBARION AND HABIBULLAH ENERGY LTD.......................... 17 CHAPTER 5 ....................................................................................... 18 PROJECT PLANNING IN BRIEF .............................................................. 18 CHAPTER 6 ....................................................................................... 19 MAJOR STAKEHOLDERS & SCORING MODELS............................................ 19 6.1 BANKS ................................................................................. 19 6.2 CONTRACTORS .................................................................... 19 6.3 GOVERNEMENTAL BODIES .................................................. 19 6.4 HISTORICAL FINANCIAL RATIOS FOR THE RECENT YEAR ... 19 6.5 SCORING .............................................................................. 19 6.6 SPECIALIST FIRM FOR CONDUCTING THE FEASILBLITY STUDY ....................................................................................... 20 CHAPTER 7 ....................................................................................... 22 CONFLICT & NEGOTIATION ISSUE .......................................................... 22 CHAPTER 8 ....................................................................................... 23 PROJECT SCHEDULING ....................................................................... 23 8.1 PROJECT MANAEBMENT ...................................................... 26 8.2 PROJECT HUMAN RESOURCE REQUIREMENT ..................... 26 8.3 THREE PHASE PROGRAM .................................................... 27 CHAPTER 9 ....................................................................................... 28 PROJECT COST ESTIMATION .................................................................. 28 9.1 FEAAILBILITY OF THE PROJECT ......................................... 28 9.2 PROJECT COST ESTIMATION ............................................... 29 CHAPTER 10 ...................................................................................... 31 PROJECT PC I, PC II, PC III AND PC IV SPECIFICATIONS................................. 31 10.1 PC I ....................................................................................... 31 10.2 PC II (SURVEY AND FEASIBILY STUDIES) ........................... 33 10.3 PC III (ANNUAL TARGETS AND PROJECT REPORTING) (1ST JULY OF EACH YEAR) ................................................................ 34 10.4 PC IV (PROJECT COMPLETION REPORT) ............................. 35 CHAPTER 11 ...................................................................................... 37 WORLD BANK COMMENT ON PAKISTAN ENERGY SECTOR:............................ 37 CHAPTER 1 PAKISTAN: AN OVERVIEW OF POWER SECTOR 1.1 POWER SECTOR IN PAKISTAN Pakistan is a progressive nation with a buoyant economy is located in one of the most important economic zones of the world and provides excellent combination of natural and human resources for the prospective investor. The generation, transmission and distribution and retail supply if electricity is presently undertaken by 2 units namely WAPDA and KESC. The power wing of WAPDA is being restructured with the ultimate goal to make power sector stronger. The transmission system of WAPDA and KESC are interconnected through 220 kV double circuit line. Presently total installed electricity generation capacity is about 19478 MW. The future forecast for electricity demand is about 5500 MW in future. This will further increase in the year 2010. Figure 1 1.2 INDICATIVE FORECASTED DEMAND AND SUPPLY GAP Figure 2 1.3 MAIN PLAYERS OF PAKISTAN POWER SECTOR Water & Power Development Authority (WAPDA ) Natioanl Electric Power regulatory Authority (NEPRA) Sind Coal Authority (SCA) Private Power and Infrastructure Board (PPIB) Karachi Electric Supply Corporation (KESC) Geological Survey of Pakistan (GSP) Pakistan Electric power Company (PEPCO) Ministry for petroleum and natural resources Provincial private power cells Fuel research center Provincial Inspectorates of mines Mine Rescue & Training centers Independent Power Procedures 1.4 OBJECTIVES OF POWER POLICY PAKISTAN 1) To provide sufficient capacity for power generation at least cost, and to avoid capacity shortfalls 2) To encourage and ensure exploitation of indigenous resources which include renewable energy resources, human resources, participation of local engineering and manufacturing capabilities. 3) To ensure that stake holders are looked after in progress 4) To be attuned to safeguard the environment 1.5 SCOPE OF POWER POLICY PAKISTAN Private sector projects Public sector projects Public-Private partnership projects Projects developed by public sector and then divested 1.6 PROJECT PROCESSING FEATURES 1.6.1 SOLICITED PROPOSALS Sr. 1 Activity Submission prequalification documents by sponsors Typical time of 30 2 Evaluation prequalification documents of 30 3 Approval of PPIB Board 15 & notification to pre- qualified bidders 4 Issuance bidders 5 Present minimum 120 of RFP to 15 functional specification 6 Evaluation of bids, 60 approval of PPIB board 7 Approval of NEPRA and 21 ECC 8 8POSTING OF 10 performance guarantee 9 Issuance of Letter Of 5 Support by PPIB 1.6.2 PROCESSING OF RAW SITE PROPOSALS Figure 3 CHAPTER 2 THE PROJECT NAME, SPECIFICATION 2.1 PROJECT NAME AND SPECIFICATION PROJECT NAME 157 MW Natural Gas Fired Combined Cycle Power Project LOCATION Shekhmando, Quetta PARENT COMPANY Habibullah Energy Ltd. MAJOR CONTRACTOR Alstom , Albario NAME OF POWER PURCHASER WAPDA July 31st, 1994 DATE OF AWARD OF PROJECT DURATION OF Approximately 3 years REHABILITAION/CONTRACTION PERIOD TOTAL PROJECT CAPITAL COST OF US $155 million FINANCING MIX (20,80) (Equity, Debt) APPLICANT SHARE OF EQUITY 50% voting equity TYPE OF PLANT Natural gas- (High BTU) EQUAL CONTRIBUTOR El Paso Corporation. HEL and El Paso Joint venture of START OF PROJECT COMMERCIAL OPERATIONS: October 1999 2.2 THE PARENT COMPANY STRUCTURE HEL group was founded by Hafiz Mohammad Habibullah. HEL is a part of Habibullah Group was established in 1987 as an unlisted public company, formed under companies Ordinance act. The company¶s objective was to develop power projects in the country. In Pursuance of the Government of Pakistan¶s policy to encourage private sector for power generation, HEL was the first to take initiative for 157 MW Natural Gas Fired Combined Cycle Power project. - Quetta, Pakistan. 2.3 HABIBULLAH GROUP DIRECTORS Mr. Saeedullah Khan Paracha     Currently, MD Habibullah Coastal Power Pvt. Ltd. MD, HEL Chairman HEL mines Partner H.M Habibullah Co. Mr. Hamidullah Khan Paracha  Director, Tandlianwala Sugar mills  Partner, H.M Habibullah Co.  Director, Matiari Sugar Mills Mr. Tariq Saifullah Paracha Senior VP Habibullah coastal power Pvt. Company 2.4 QUETTA POWER PROJECT: In pursuance of the Government of Pakistan¶s policy to encourage private sector for power generation , Immortal Energy ltd. Was the first to take initiative for the establishment of 157 MW Natural Gas Fired Combined Cycle Power Project-Quetta , Balochistan. The initiative for establishing of the power plant was undertaken at the invitation of the Gov. of Pakistan and in London Investment conference in 2005 where Federal secretary invited Immortal Energy Group to come forward and establish the power plant at Quetta, Balochistan in the private sector. This project is located in Shekhmando, Quetta which is the best and ideal location for a power project. WAPDA¶s grid station is hardly at a distance of 2km. The plant has excellent thermal efficiency through combined cycle system which involves major equipment which inter-alia encompasses: Gas Turbines & accessories Steam turbine Waste Heat recovery Air Cool Condenser Fuel Gas Compressor Water Treatment Plan The implementation agreement, power purchase agreement between HEL and WAPDA were finalized. 2.5 RESPONSIBILITIES OF DIRECTORS Responsible for management and supervision of Immortal Energy Ltd. which operates 157 MW power generation plant at Quetta. Formulation of policy framework for best interest of company affairs. Providing guidelines for day-to-day operation of Quetta Power plant. Resolving day to day major issues pertaining to WAPDA vis-à-vis Quetta power plant. Attending and presiding over the Board of Directors meeting in USA or Pakistan. Providing directives to professional staff in resolving financial and technical issues with WAPDA and PPIB. 2.6 FUTURE ENDEAVORS: CAPACITY EXPANSION OF THE EXISTING 157 MW COMBINED CYCLE GAS POWER PLANT AT QUETTA HEL intends expanding/duplicating the existing plant capacity by another 157 MW using the proven design & engineering already used at the existing Plant. A major portion of the natural gas for the proposed expansion could come from gas fields of Zarghun and Khust (near Ziarat), which are being developed by Mari Gas Company Ltd. We would also need additional gas allocation by the Ministry of Petroleum & Natural Resources. The Proposed expansion of the Quetta Power Plant would help: Minimize WAPDA¶s¶ financial losses considerably by reducing the heavy transmission losses Overcome load requirements Strengthen/stabilize WAPDA¶s Grid System in the region Reduce the voltage fluctuations Provide electricity in surrounding/adjacent regions 2.7 AFFILIATED COMPANIES HABIBULLAH GROUP Habibullah Coastal power Private Company Tandlianwala Sugar Mills Ltd. HEL Habibullah Mines Pvt. Ltd. A Power generation company A Sugar Manufacturing company A Power Project Development Company A Coal Mining Company Figure 4 CHAPTER 3: HYDEL POTENTIAL IN BALUCHISTAN Pakistan¶s industrial growth and development depended substantially on the availability of reliable electric power. About half of the nearly 140.5 billion people (2001 population estimate) have no access to electricity; this huge population base provided an ideal opportunity for expansion of electricity generation. Since the 1980s, power supply has lagged behind demand, resulting in major load shedding of up to 30 per cent of peak demand. A government-initiated study on power shortages conducted in 1994 highlighted that an additional generation capacity of about 9,800 MW was needed by year 2020. Of this additional capacity, 4,600 MW was under construction, or in the early stage of planning by the government sector while the balance of 5,200 MW was recommended to be installed by the private sector Pakistan¶s power-generating capacity grew from 119 MW at the time of partition from India in 1947 to almost 17,664 MW in 2004. In the total installed capacity, the share public sector was around 70 per cent and the private sector 30 per cent. The generation, transmission, distribution and retail supply of electricity in Pakistan was undertaken mainly by two government-controlled public sector utilities: WAPDA and the Karachi Electric Supply Corporation (KESC). WAPDA supplied power to all of Pakistan except the metropolitan city of Karachi and some of its surrounding areas, which were supplied by the KESC. The private sector included sixteen independent power producers (IPPs) established on a Build, Own and Operate (BOO) basis, mainly under the private power policy announced by the Government of Pakistan in 1994. Figure 5 Figure 6 CHAPTER 4 PROJECT TEAMS, CONTRACTORS AND SUB CONTRACTORS Alstom power has very vast experience in power generation as EPC contractor. Alstom has worked in the development of various power generation plants including rehabilitation, maintenance and installation, These power generation are located in Pakistan and all over the world. In Pakistan Alstom has been operating in power business since 1957. Their share in MW installed was 15%. Albario O&M contractor is the official representative of General Electric USA in Pakistan. It is engaged in operation and mainteenace. 3.1 ORGANIZATION CHART OF HEL PARENT COMPANY Chairman Managing Director Director Operations Project Engineer I Project Engineer II IIIIII Director Coordination 3.2 ALSTOM POWER EPC CONTRACTOR At ALSTOM, we offer a comprehensive capability, possessing the broadest scope of power generation systems, equipment and services in the industry. Our customers enjoy the maximum of options plus the most economical, environmentally friendly and advanced technologies. The services provided them include: Combined Cycle Plants Conventional Steam Power Plants Steam Cycle add-ons Nuclear Conventional Island Repowering and Rehabilitation Electrical & Control Systems Turbo machines Portfolio Alstom Structure ALSTOM's Power Sector is organized in 2 Sectors: Power Systems, and Power Service 3.3 ALSTOM EMPLOYEES BY REGION Figure 7 3.3 ALBARIO ENFINNERING LTD It was created in 1964. The Head Office is located in Lahore. It has an experience of over 5 decades in Pakistan¶s Energy sector. It has executed projects in the following areas: Thermal power station Hydel power Generation Civil construction Sponsor/developer Electro mechanical contracting services Its Customers are: WAPDA PARCO NRL OGDC,PPL SSGC Pakistan Railways FGFC FFC 3.4 LIST OF FAMOUS PROJECTS PAKISTAN Installation 60 MW East Pakistan Installation 60 MW Chitagong CM&U 4*25 MW GT WAPDA, Faisalabad Erection, and installment of 4*40 MW hydro power station at warsak Supply & Installation of 2*100 MW Hydro Power station at Mangla Installation 4*33 kv grid stations 3.5 ALBARION AND HABIBULLAH ENERGY LTD. O&M Subcontractor for GEII managing Operation and maintenance of the 126 MW CC HEL power plants. Responsibilities are: Human Resource Management Plant Operation Plant Maintenance General plant administration Sponsor/Developer 100 MW wind turbine Power project Balochistan Summar Gah 28 MW HPP-NWFP LOS 6 MW HPP- Canal Fall in Punjab CHAPTER 5 PROJECT PLANNING IN BRIEF PROJECT SCHEDULES Cost Schedule Tentative Financing Pattern Local Sponsor Equity Composition USD 155 Million 80%Loan, 20 % Equity HEL HEL USD $ 10 Million National trading Co. USD $ 47 Million LOS by Equity Commitment Letter Internal Rate Of return Tariff 21% guaranteed WAPDA will provide high Tariff CHAPTER 6 MAJOR STAKEHOLDERS & SCORING MODELS 6.1 BANKS Muslim Commercial Bank Ltd, Karachi Muslim Commercial Bank Gari Khata, Hyderabad Investment Corporation of Pakistan, Karachi Bank of Scotland, Ireland Barclays Bank London 6.2 CONTRACTORS Alstom and Albario as EPC contractors 6.3 GOVERNEMENTAL BODIES PPIB WAPDA 6.4 HISTORICAL FINANCIAL RATIOS FOR THE RECENT YEAR Current ratio 4.60 Net Profit margins 28X Return On Assets 65x Return on equity 79x 6.5 SCORING Weights assigned Category Technical Strength Factors A. Experience in 50% conducting feasibility study B. Power project 50% Experience Financial Strength A. Previous experience 100% 1) Power project financing 80% track record 2) Credit references B. Capability 100% 1) Credit Rating 2) Credit references 20% 20% 80% Total score is like: 0.55*(Category 1 score) + 0.45*(category 2 score) Total score of category 1 = 0.50*(Score factor A) + 0.50 *(Score Factor B) Power projects over .75 x MW Role of applicant Initial Partner EPC Contractor O & M Contractor Points/project 12/8 14 10 6.6 SPECIALIST FIRM FOR CONDUCTING THE FEASILBLITY STUDY Lameyer International GmbH is recognized as an independent firm of consultants by WB, European Banks and Regional Development Banks. It offers a wide variety of consulting engineers. It uses software like SAP R/3 for financing, controlling and project management. It has Re/master program to design the new equipment needed to convert a pure stem power plant to combined cycle and stimulates performance. It uses PROJECT TIME SCHEDULING PROGRAMS LIKE PROJECT COST CONTROLLING AND RESOURCE PLNANNING PROGRAMS. The project management software it uses gives: Evaluation sheets Bill of quantities Specifications Site inspection and test schedules It also uses a PROJECT MANUAL which defines all the procedures and details for coordination of activities. CHAPTER 7 CONFLICT & NEGOTIATION ISSUE For many years investments projects in the province of Balochistan have been subjected to uncertainties and abnormal conditions. The crisis led by Akbar Bugti over the pipeline issue made Balochistan an insecure investment option. Therefore, knowing the conditions (gas pipeline); El Paso was advised to insure its plant and operational equipment by a firm. There were many issues regarding all this. El Paso insured its plant and other equipment, hence taking into account the uncontrollable and uncertain conditions in Balochistan. The uncertainty factor did not only come from the Bugti side, but also the border and political government crisis prevailing in Quetta. It was a wise decision by El Paso to make secure all of its assets, plant and equipment. However, the insurance negotiation and the amount in dollars is a business secret and the information is confidential. Nothing much information is available about the dollar value of the insurance and other specifications. The main conflict rose with the Habib Ullah Energy Ltd., which was resolved after a couple of months and the final decision were hence taken. El Paso has taken certain decisions in other parts of the world, especially stagnant world economies. Government where such highly uncertain conditions exist, El Paso has insured its plants everywhere. CHAPTER 8 PROJECT SCHEDULING Figure 8 Figure 9 Figure 10 Figure 11 Figure 12 Figure 13 8.1 PROJECT MANAEBMENT Training The project includes Training of operating staff for a certain period and certain foreign experts will be coming. During the final stage of erection, a practical training will be given by the instructor for 5 hours. Engineering Project Management in Pakistan and civil engineering was also included in the project. The costs of the civil works including the preparation of site were estimated on the basis of offers on local conditions. The costs for erection and commissioning as well as contractor¶s risk insurance were included in the project. The operating assistance during the first years of expatriate specialist assisted the local staff in operation and maintenance of the plant. During the period of assistance, the specialist transferred the duty so that the operation takes place effectively. 8.2 PROJECT HUMAN RESOURCE REQUIREMENT Both h skilled and unskilled man power was needed in the project. Skilled man power comprised experienced staff. The staff was headed by electrical and mechanical engineers having 15-20 years experience. Locally recruited staff comprised manager, asst manager, engineers and unit operators. On-the-job training was provided for about 6 months. 8.3 THREE PHASE PROGRAM The assistance by experts followed a 3 phase program. Phase 1 Experts supervised the operating staff and were responsible for operation of project Phase 2 Experts transferred responsibility from counterparts. Phase 3 Local operating staff was advised by experts. During phase 1, experts wee 100% responsible for performance of the plant. During phase 2 the warranty linked with contractual responsibility expired. CHAPTER 9 PROJECT COST ESTIMATION 9.1 FEAAILBILITY OF THE PROJECT There were many factors that influenced the feasibility of the project. These include: Interest rates Maturity of loans Exchange rates Taxes and fees The project cost was determined on the following basis. PROJECT COST: It included cost of plant, equipment and services for the power station excluding import fees TOTAL COST: project cost plus import fees and preproduction cost IMPORT FEES: IQRA, Surcharge, import license fee PREPRODUCTION COST: Interest during construction, commitment fees, and export credit agency premium Unit rate: one KWH in Rs. Financing scheme: Equity: 20 % of project cost Debt: 80% of project cost Depreciation period: 25 years with salvage value of 25 years Contraction period: 30 months Preproduction cost: Interest payable on capital investment which is utilized during the construction period The interest and fees on utilized amounts were accumulated and repaid with the loan. The repatriation, of principles, interest and fees was calculated on semi annual basis. 9.2 PROJECT COST ESTIMATION A Top down approach was used in the project cost estimation. For some parts of the project where debt equity structure and other specifications were made. Work Element costing was also used where cost of each per unit is prescribed. Direct cost for resources and machinery were charged directly to the project and not subject to over head charges. The charge for machines was tread as operating cost. For example: Parameters like «««««. Were used in cost calculation: Price Price Heating value Energy sold Equity Debt Rs. 383 5750 BTU/LB 919,800,000 KWH 20 % 80% COST OF PROJECTS: This was conducted somewhat in a top down fashion. It comprised: Equity (local) (10%) Foreign (10%) WB window Export credits Commercial loans 30% 38% 12% 20% COST OF THE PROJECT FURTHER INCLUDED: (IN 1000 RS) FOREX Local portion Project cost Import fees Interest and fees during construction 3,022,230 625,580 3,647,810 453,355 704,455 Total preproduction cost Total cost 1,157,790 4,805,600 Operating costs: The se include Fuel cost Salaries Insurance Supplies, chemicals, disposal Interest on working capital Leases and rent The operating costs include salaries in foreign currency for foreign experts to operate and supervise the plant mainly in firs t years. Work element costing Fuel cost is determined like: 822k130 t/a Rs./t=0.3423 Rs. /KWHr The salaries for local staff are determined as: 12,750,000 Rs. /a = 0.0139 Rs. /KWH Insurance: 70,511,000 Rs. /a = 0.0767 Rs. /KWH Ist year of operations = 18328,000 Rs. /a = 0.0199 Rs/kwh Second year of operations = 17,042,000 Rs. /a = 0.0186 Rs/kwh Third year of operation = 9,753,000 Rs. /a = 0.0106 Rs/kwh CHAPTER 10 PROJECT PC I, PC II, PC III AND PC IV SPECIFICATIONS 10.1 PC I The some of the particulars of PC 1 form of the project are: 1 Name Of Project Habibullah Coastal Power Company Quetta power project 2 Location 3 Authority Responsible for a) sponsoring b) Execution c)Concerned federal Ministry 4 Project Objectives and its relationship with sectoral objectives Minimize WAPDA¶s¶ financial PPIB , WAPDA Habib Ullah Energy ltd. Quetta, Balochistan losses considerably by reducing the heavy transmission losses Overcome load requirements Strengthen/stabilize WAPDA¶s Grid System in the region Reduce the voltage fluctuations Provide electricity in surrounding/adjacent regions To build d and operate a power plant of suitable size To reduce critical power shortage during winter time 5 Description, Justification and Net electrical output, Price Energy sold in KWH, Depreciation period, construction period technical parameters 6 Capital cost estimates Project cost + import fees and production cost i.e. 4805,600 (in 1000 of Rs.) 7 Annual Operating and maintenance cost after project completion These include Fuel cost, salaries, Insurance, Supplies, disposal, Spares & Maintenance, Interest on working capital, leases and rents, transport cost : These re : 0.41 Rs. KWH 8 Financial Plan and mode of Financing Equity (20) (10% Local) (10%Foreign) WB : 30% Export Credits: 38% Commercial loans: 12% 9 Projects Benefits and analysis a) Financial b) Social Benefits c) Employment generation, direct and indirect d) Environmental Impact 10Management manpower Structure and including The management comprises acting requirements management and BOD. The structure comprises the head office management and operating staff at Quetta. The plant management is responsible for operations and maintenance. Manpower requirements include: PRODUCTIOBN STAFF: (Plant specialized skills during operation and maintenance stage Superintendents), Section manager, Section manager electrical control, PA to Superintendent) OPERATING engineer, STAFF: (Chemical Unit Assistant chemists, operators, Field operator, FO Boiler plant, FO Water treatment,) ADMINISTARTION: (Manager, Accountant, finance and purchase, Clerk, typist, Accountant Personnel) 11 Additional projects required to maximize socioeconomic benefits from the project None 10.2 PC II (SURVEY AND FEASIBILY STUDIES) Things discussed briefly under PC 2 are: 1 Name by which Feasibility will be conducted Lahmeyer International LI an independent firm of consultants. It covers a range of advisory, planning and design services, with core in power generation. The services comprise surveys, investigation, feasibility studies, risk assessments, environmental impact assessment studies etc. 2 Administrative for Authorities, and Habib Ullah Energy ltd. El Paso , Albario, Alstom EPC contractors responsible execution sponsoring 3 Details of feasibility study a) General description The implementation period was 30 months, The aim of feasibility study was to conduct b) Implementation period c) year wise estimated cost d) Man power requirements e) Financial Plan costs and factors both strategic and financial which occurred. The factors involved interest rates, cost of plant, FOREX rates, taxes, insurance fees, total cost, unit rates import fees, preproduction costs, export agency credit premium, surcharge, IQRA , mode of financing , (already discussed), manpower and requirements, (already discussed) investments costs. The period of contract was approximately 3 years. The sources of financing are already discussed. (20 % Equity, 30 % WB, Export credits 38%, 12% commercial loans). Local as well as foreign personnel are also discussed in the project. 4 Expected outcome of feasibility study The expected outcome of the feasibility study was the estimation of cost and schedules, Personal required and other specifications. 10.3 PC III (ANNUAL TARGETS AND PROJECT REPORTING) (1ST JULY OF EACH YEAR) Name of project Habibullah Coastal Power Company Quetta power project Approved Cost Expenditure unto end PSDP allocations FEC 1 USD = 18.596 LEC Operating cost in years of operations Year 1----- 457,469 Year 2------456,183 Year 3------448,894 Year 4------439,141 Year 5-10 ------439141 11-25------------439141 The cash flow analysis shows that discounted cash flows for 10 years. 10.4 PC IV (PROJECT COMPLETION REPORT) Name of Project Habibullah Coastal Power Company Quetta power project Implementation period as per PC 1 Date of project award July 31 1994 Date of financial closing April 4 1996 Duration of contraction 3 years Commercial operation date of each unit 1999 Actual Capital cost Planned Actual USD 155 million USD 180 ( Changes due to FOREX, interest payments, amortizations, unit costs variable as well as fixed) Financial results based on actual cost Actual Time Planned time The IRR was 21 %. 6 years 4 years Most of the things of PC I, PC II, III and IV are discussed in detail in the entire report in form of chapters. The last chapter provides only the summarized version of the components of PC forms in Pakistan. The rest of the components of PC 1, PC 2, PC 3 and PC 4 pro forma are discussed in quite a detail in the project report. The last chapter world Bank comment and lessons learned provide a feedback on energy sector investments in Pakistan. CHAPTER 11 WORLD BANK COMMENT ON PAKISTAN ENERGY SECTOR: Beginning in 1987, Pakistan requested assistance from the World Bank to increase private sector participation in the energy sector. An initial framework of incentives to attract private investment in the energy sector was put in place in 1988 which addressed the following constraints: ‡ The absence of a comprehensive policy framework concerning incentives, fiscal treatment, repatriation of profits and capital, availability of foreign exchange, and pricing; ‡ The lack of long term financing for projects with long gestation periods and economic life; and ‡ The inadequacy of the institutional arrangements for the review, negotiation and approval of private sector projects. In July 1992, the Government of Pakistan (GOP) adopted a Strategic Plan for power sector privatization. Under this plan, the Water and Power Development Authority (WAPDA), the main electric utility in the country, would be unbundled into separate generation, transmission and dispatch, and distribution companies and gradually privatized. The private sector would be invited to construct and operate new thermal generation plants, and an independent regulator would be established. In support of this policy, the World Bank approved the US$150 million Private Sector Energy Development Project (PSEDP 1) in June 1988. Its objectives were to: (i) Assist Pakistan in mobilizing, from the private sector, the resources required to meet the anticipated deficit in power supply; (ii) establish incentives to encourage private sector participation; and (iii) establish an institutional framework required to facilitate private sector transactions in energy on a sustainable basis. The Second Private Sector Energy Development Project (PSEDP II) was approved in November 1994 for US$250 million. It replenished the Long Term Credit Fund (originally known as the Private Sector Energy Development Fund) established under the first project with the objective of continuing to (i) assist the Government in mobilizing additional private sector resources; and (ii) build on the institutional and policy framework established to facilitate private sector REFERENCES Stephen P. Robbins, ³Organizational Behavior´, 11th Edition, Prentice Hall of India, 2005 Jack Meredith, Samuel J. Mantel,´ Project Management´, A managerial Approach, 5th Edition, John Wiley & Sons Inc Statement of Qualifications, HEL: Volume 1 & 2 Julia M. Fraser, ³Lessons Form the Independent Power Sector Experience in Pakistan´, Energy and Mining Sector Board discussion paper, World Bank Group