Pakistan: Power Transmission Enhancement Investment Program Tranche 3

Energy - Electricity transmission and distribution

The Tranche 3 subprojects are part of Pakistan's integrated power transmission system development plan. The investments will enhance the efficiency of the overall power transmission system and provide an adequate and reliable power supply to a greater number of industrial, commercial and residential consumers.

The Tranche 3 subprojects will improve power transmission infrastructure through development of additional 500 kV transmission lines and grid substations facilities, and relieve the power system bottlenecks. Tranche 3 will specifically (i) increase interregional transmission capacity and (ii) evacuate power from new power stations to the load centers.

The outputs of the subprojects in Tranche 3 include (i) addition of approximately 600 km 500 kV transmission lines, (ii) commission of one new 500 kV grid station and expansion of four existing 500 kV grid substations, (iii) improved security of supply to customers by moving towards compliance with regulatory security standards governing planning and operation, and (iv) improved reliability of the primary transmission system.

Pakistan's power system continues to operate under stressed conditions. The transmission network, the power system's backbone, requires renovation and expansion in order to meet the objective to supply reliable and high-quality power and meet rising demand from industrial, commercial, agricultural, and domestic customers.

The Government has requested ADB to finance construction of a circuit of 500 kV transmission line of about 600 kilometer (km) and a new 500 kV Grid Substation at Moro, under Tranche 3. The proposed subprojects will increase transmission capacity and improve efficiency and security of supply in the Sindh and Punjab Provinces of Pakistan. The proposed subprojects will evacuate the power generated from the Independent Power Producers (IPPs) which are expected to be in commission by 2013-2015. These investments are consistent with the Government's strategy to achieve the following outcomes: (i) a more efficient power system; (ii) high-quality power supply through a more reliable and stable system; (iii) greater geographic coverage of power supply; and (iv) greater access to affordable electricity, by bringing additions of generation capacity and energy to load centers.

Three contracts for ADB-65 Package 1, Lots 1-3 ongoing. Due to rebidding and contract execution delays, target end date revised to Dec 2016. Loan closing date extended to 31 December 2016. Progress of the Lots 1, 2 and 3 is 76.69%, 81.69% and 75.41% respectively.

Contract for ADB-68 ongoing. Due to rebidding and contract execution delay, target end date revised to June 2016. The contract would not be completed in June 2016. PMU advised to request further contract extension. The overall progress is 63.93%.

Contracts for ADB-65 Package 2 and ADB-67 ongoing. Due to rebidding and contract execution delays, target end dates revised to May and Nov 2016, respectively. Package 2 would not be completed in May. PMU advised to request contract extension. The physical progress of package 2 is 65.4% and package 67 is 32%, respectively.

Environmental assessment for all the subprojects was conducted in accordance with the Environmental Assessment Review Framework (EARF), prepared by the Government and agreed with ADB, and in compliance with ADB's Environment Policy (2002) and Environmental Assessment Guidelines (2003), and the Government's environmental assessment regulations and guidelines (Pakistan Environmental Protection Act 1997). All the subprojects under Tranche 3 have been categorized as B under ADB's environment guidelines. Environmental assessments have been carried out for each subproject. An initial environmental examination (IEE) report and an EMP with implementation budget have been prepared for all the subprojects.

Subproject components will be designed, wherever possible, to minimize adverse environmental impacts. To mitigate the potential adverse impacts of the construction stage, detailed EMPs will be updated as part of the IEEs. No component of any subproject falls in an environmentally sensitive or protected area. The subprojects are all a long way apart and therefore there is no significant potential for cumulative impacts in the design, construction, or operational phases. The objective of the Tranche 3 is to produce cumulative benefits to the transmission system in the operational phase.

NTDC will implement and monitor the submission and clearance of IEEs under statutory provisions. It will ensure that bidding documents and contracts include the mitigation measures required in the EMPs and that the mitigation measures are implemented by the contractors.

The subprojects will involve the construction of transmission lines and grid stations. The processing of land acquisition and income rehabilitation tasks for Tranche 3 has been and will be based on the requirements of the ADB's Policy on Involuntary Resettlement and on the same stipulations set in the LARF prepared for the Program. The subprojects will not require permanent land acquisitions as the land for the proposed new substation is already the property of NTDC. There will be damages to crops and other assets lying in the Right of Way of the transmission line which have been quantified. The draft Land Acquisition and Resettlement Plans (LARP) has been prepared.

The identification and layout of the site and a technical drawing showing line profile with complete tower spotting have been made for carrying out the resettlement field surveys. The original design of this proposed transmission line was prepared in mid-1990s, following which the construction of tower foundations which begun in 1996. But then the work was discontinued mid-way in 1997, reportedly because of non-availability of funds. Considering the subproject abandoned, the local people started constructing residential and commercial structures on their lands, right in the 50 meter wide Right-of-Way of the line route. To avoid the potential social impact, NTDC conducted a resurvey of the identified sections (6% of the total length) with existing structures and realigned the route to avoid those structures. Accordingly, the LARP will be updated. The consultant to update LARP is being recruited. Unless the updated LARP is approved by ADB, the construction on the realigned section should not be started.