The 300 MW imported coal power project at Gwadar is at risk of being cancelled due to ongoing delays and tariff disputes. The Chinese company responsible, M/s CIHC Pak Power Company (Pvt) Ltd (CPPCL), has not started construction despite receiving repeated extensions and support from Pakistan’s government. The project, initiated in 2019 with a Financial Closing (FC) deadline of April 2020, has faced multiple delays, including issues with tariffs, lender hesitation, and obtaining necessary approvals. The FC date was extended to December 2024, but CPPCL has not paid the fee for the extension.
While the Pakistani government has facilitated tariff revisions, with Nepra increasing the rate to 9.0818 cents/kWh, CPPCL is dissatisfied and seeks further revisions, delaying progress. Despite several meetings and reminders from Pakistani officials, construction remains stalled. In July 2024, Pakistan’s Minister for Planning, Development, and Special Initiatives met with Chinese officials, emphasizing that no further tariff revisions would be made and urging a decision within 15 days.
As the September 18, 2024 deadline approaches, the government awaits CPPCL’s final decision. If no response or progress is made, the government may take alternate actions, potentially scrapping the project, which is crucial for Gwadar’s development under CPEC.
