R E S T R I C T E D

ANNEX IV to R e p o r t N o. AS-85a

FIlE CCFLThis report was prepared for use within the Bank. It may not be publishednor may it be quoted as representing the Bank's views. The Bank accepts noresponsibility for the accuracy or completeness of the contents of the report.

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

DEVELOPMENT PROGRAMING AND ECONOMIC CONDITIONS

IN PAKISTAN

ANNEX IV

THE ELECTRIC SUPPLY PROGRAM

May 1Z, 1961

Departinent of OperationsSouth Asia and Middle East

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CURRENCY EQUIVALENTS

4.762 rupees = U.S. $1.00

I rupee = U.S. $0.21

1 million rupees = U.S. $210,000

1 billion rupees = U.S. $210 million

AN`U7EX TV

THE ELECTRIC SUPPLY PROGRAM

Table of Contents

PageNumbers

Electric Supply in Karachi 5

VIAPDA - The Main Power Authority 7

WIAPDATs Wlest Pakistan Grid 7

The Isolated Systems of West Pakistan 11

Upper Sind (Sukkur) 11

Lower Sind (Hyderabad) 11

The Baluchistan Area (Quetta) 12

The Village Electrification Program 13

The Electric Supply Industry in East Pakistan 13

East Pakistan Easterin -- rid Region 15

East Pakistan Wester2n Grid Region 16

The Prospects for Nuclear Energy 17

Electricity Regulation and Rates 18

A!ITNE X IV

THE ELECTRIC SUPPLY PRCGRAM

List of Tables

PageNumbers

lo Program for Power Development in the Second Plan 1

2. Growth of Installed Capacity in Pakistan Between1947 and 1960 2

3. Actual and Estimated Sales, Number of Customers,Installed Capacity and Peak Load in Karachi 6

4. Electric Consumption and Number of Consumers inWest Pakistan Grid Zone 8

5. Installed Capacity and Firm Capacity of the PowerStations Connected to the West Pakistan Grid inDecember 1960 9

6. The Installed and Firm Capacity and Peak Demand ofthe Power Stations in the Isolated Sys-tem in WestPakistan in 1960 12

7. Installed Capacity in East Pakistan as of 19L47 and 1960 14

8. WAPDA's Eastern Division Load Forecast of lMlaximum

Demand in 1960, 1963 and 1967 15

9. 1IJjPDA's Western Division Load Forecast of MaximumDemand Expected in 1960, 1963 and 1967 17

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MAY 1961 IBRD-815

ANNEX IV

THE ELECTRIC SUPPLY PROGRAM

The electric supply industry has been making substantial progressduring the past decade as the result of large capital expenditures. TheFirst Five-Year Plan allocated some Rs. 460 million for generating andtransmission equipment. The Second Plan as originally conceived carriedthis program still further with a large increase in expenditures for trans-mission and distribution facilities and a total program of around Rs. 1,200million. Of this sum about Rs. 400 million or the same as in the FirstPlan was set aside for new generating equipment, with an amount of nearlyRs. 800 million for transmission and distribution facilities, as comparedto only Rs. 260 million for such facilities during the First Plan period.Since the Mission's return the allocation for the sector has been in-creased substantially. Rs. 427 million additional have been included fordistribution of power and rural electrification in West Pakistan alone.The West Pakistan high tension grid and secondary transmission and distri-bution system is estimated to have increased in cost by Rs. 83 million. Intotal the allocation for electric power has increased by some Rs. 600 mil-lion and according to the latest estimates available to the Mission nowamournts to nearly Rs. 1,800 million.

Table 1: PROGRAM FOR POJIER DEVELOPRvJOIT IN THE SECOND PLAN(in Million Rupees)

Original Additions RevisedEast Pakistan Allocation to Plan Plan

Secondary transmission and dis-tribution 109.3 - 109.3

Commilla-Sylhet transmission (132 kv) 38.6 - 38.6Coalpara-Bheramara H.V. interconnector 21.2 - 21.2Dacca Electric Supply 19.5 19.5Sidhirganj diesel project 10.5 10.5Electrical equipment pool 25.0 - 25.0Karnaphuli Hydro & misc. small proj. 64.o 4o0.0 1040

Total East Pakistan 288.1 10.0 328.1West PakistanDistribution project 246o0 - 246.0Secondary transmission & distribution 156.9 20.0 176.9MIultan extension 85.0 - 85.oSukkur thermal 47.0 6.0 53.0Cuetta thermal 31.4 6.o 37.4Hyderabad extension 20.0 20.0Hyderabad thermal 20.0 - 2000High tension grid 40.0 53.0 93.0Lyallpur-Multan second circuit 11.7 lr8 13.5Gujranwala & Shadiwal hydroelectric 4.4 27.2 31.6

Total West Pakistan Z727, 11Th 77-TAtomic Energy 146.5 146.5Karachi Electric Supply Corporation 190.0 - 190.0Village Electrification & misc. distrib. - 427.0 427.0

Tentative Total 1,187.0 581.0 1,768.0

20 Generating capacity has been installed at an annual rate of morethan 16% since 19h7. Nearly 200,000 kw were installed in the periodbetween 1947 and 1955 and an additional 560,00o kw during the First Planperiod. This growth of the electric supply industry is unusually rapidfor a long period such as 12 years even for a rapidly growing country likePakistan. Nevertheless, the shortage of electricity continues and is aserious impediment to the industrial development of the country becausemuch capacity is not being fully utilized now. The Mission found that inno part of the country is an adequate electric supply available to theconsumer. As the result of the completion recently of several largeprojects, there is a feeling of confidence within Government circles thatthe power situation will improve greatly during the early years of theSecond Plan period and the Mission believes that with the proper managementof the facilities that are becoming available, this should be possible.

Table 2: GROWJTH OF INISTALLED CAPACITY IN PAKISTAN BETWjEEN 1947 AND 1960(in thousand kw)

West PakistanEast Grid and Isolated Total

Year and Sector Pakistan Systems Karachi Pakistan

1947Public Utilities 6.7 68.0 6.o 80.7Industrial Estab. 15.3 4o0o 9O0 64.7

Total 22.0 10l8.0 o.0 1T1955

Public Utilities 32.2 132.8 35.h 200.hIndustrial Estab. 42.0 63-0 37,0 1L2.0

Total 79.2 19 720h 3L2.h1960

Public Utilities 103.2 490.3 60oo 653.5Industrial Estab. 72.0 122.0 58.0 252.,0

Total 1-7E7T2 612.3 loO770

3. The Mission does not question the view that serious attentionwill have to be given to the fuller utilization of the new power stationsthat already have been installed in the country. One of the two units ofthe new 130,000 kw steam station at Multan was not operating during theMission's visit due to the lack of a load pending the completion of thetransmission and distribution network. The newly completed 160,000 kwhydro station at 77arsak in the northern part of the W,Test Pakistan grid wasalso being operated at lower than its water capability because of a similarlack of load which is also related to the transmission program. TheGovernment in the Second Plan has stressed an approach that places "higherpriority to transmission and distribution of existing power than to genera-tion of additional power". The Mllission is of the opinion that in generalthis is a sound approach. However, there may well be doubts as to thedistance over which the transmission of electricity in Pakistan is justifiedand to what extent small villages and rural areas should be electrified.

The scale of the transmission and distribution program may be too large,and there is the possibility in soarre cases that it may be justified only asa means of absorbing surplus uneconomic capacity such as at Kaptai. Karachiis, at the moment, the only major area in the country where the currentlevel of firm caDacity is substantially below demand but there, the in-stallation of new generating capacity is to be large during the next twoyears.

Part of the current difficulty with regard to capacity utiliza-tion is due to the fact that the power program only picked up momentumduring the late years of the First Plan period. The new organizations forpower development - the East and West Pakistan's WAPDA - were only formeda year or two ago. Furthermore, the actual expenditures on wiater and powerddvelopment did not begin to increase rapidly until the latter part of thePlan period. They were, in fact, twice as high during 1959/60 as in 1955/56,and are expected to reach a level of 50% again as high during the year1960/61. The power program was already in serious difficulty by the middleof the First Plan period when expenditures were thought to have fallenshort of the targets set in the Plan by at least 20% and installed capacityby more than that. This, in fact, was the situation until the last year ofthe Plan. Up to the middle of 1959, total installed capacity had onlyreached about 400,000 kw comrpared to a First Plan target of some 850,000 kw.In 1960, 160,000 kw were installed at 1:arsak and 135,000 kw at Mllultan plusa large number of smaller stations. In addition, there was a large in-crease in "captive" industrial capacity which was supposed to decline from142,000 kw to 111,000 kw; during the Plan neriod, but instead increased to252,000 kw. This increase in captive facilities plus the new large plantsat 1lJarsak and iMIultan enabled Pakistan to exceed the First Plan targets bythe end of 1960 when total capacity in the country reached 900,000 kw.

5. Capacity owned by public utilities, however, had only reached653,000 kw instead of the 737,900 kw that had been orig-inally planned.. Theinstallation of some large units in conjunction with industrial plants wfasmainly responsible in effect for the target having been achieved. 16,000 kwhad been installed at the Khulna Newsprint factory along with an additionall1,000 kw in the newer East Pakistan sugar, jute and textile plants. Thecompletion of captive industrial f&cilities in West Pakistan was equallyimDressive with the installation of 30,000 kw at the fertilizer factoryand cement plant at Daudkhel, an additional 7,000 kT at the Hyderabadcemaent plant and a further 43,000 kw spread over miscellaneous sugar, tex-tile and other plants. In the final analysis actual expenditures in theindustrial sector were significantly above what had been expected in thePlan, whereas public sector expenditures were only some 60% of what hadbeen orogrammed. In terms of past achievements, the program for the SecondPlan period is surely ambitious.

6. The generating capacity installed in the country will continue toincrease at a substantial rate even though the emphasis in the Plan is ontransmission and distribution. Projects for which large amounts havealready been expended will reach completion during the Plan period. In

East Pakistan, the Kaptai plant on the Karnaphuli River which has beenunder construction for many years will result in an increase in capacityof 80,000 kw upon its completion in 1962. Its expansion shortly after1962 will add another 40,000 kw. A 36;000 kw plant also started some timeago will soon be completed in conjunction with the new fertilizer plant atFenchuganj.

7. Over. 200,000 kw of new capacity are scheduled for installation inthe Indus Basin region during the next five years with nearly 60,000 kw ofthis the result of projects which were started during the First Plan period.Included in this group are such old hydro projects as those at Gujranwalaand Shadiwal and the thermal plants started many years ago at Sukkur,Hyderabad and Quetta. The recently completed larsak hydro plant is to beexpanded in the next few years by 8oJooo kw. Several of the newly completedthernal stations are to be expanded. The i'iultan station is to be enlargedby I5-0,000 kw and 60,000 kw are being added to the Karachi "B" station.The only wholly new large thermal facility in the Plan is the new "C"station being planned for Karachi. The size of this plant was not finallydetermined ilihen the Mission was in Pakistan, although tentatively it hasbeen set at 150,000 kw.

8. The large sums to be invested in transmission and distributionnetworks involve substantially new projects with a rather ambitious goal.Dacca and Chittagong in East Pakistan are to be connected to the newKaptai hydro station by a high-voltage transmission line which is to becompleted early in the Plan period. The transmission line is then to beextended to the northeast to connect to the Sylhet area and the new36,000 station at Fenchuganj. On the other side of the Brahmaputra, inthe western part of East Pakistan, a separate high-voltage line is to beconstructed to connect the new Goalpara steam station at Khulna with Jessoreand in turn with the new Bheramara plant. Some of this work is alreadyunderway.

9. An expansion in the West Pakistan high tension grid is under con-struction with a 220,000 volt line from Iliultan to Lyallpur and some lowervoltage lines from there to Gujranwala, Shadiwal , Rasul and Lahore. Inthe north, the new Warsak station is to be connected to Wah and Rawalpindiby a 132,000 volt line. This whole system will be tied together by adouble circuit 132,000 volt line from 14arsak to Daudkhel and Lyallpur plusa double circuit 220,000 volt line from Wah to Lyallpur. All the mainconsuming centers of the Indus region are to be tied together electricallyin one grid. It is envisaged that this system will require nearly 9,000miles of new transmission lines plus substantial distribution equipmentbefore the energy can be brought from the primary to secondary load centers.

10. The most doubtful part of the electric plan seemed to the f'iissionto be the substantial program involving the electrification of some 1,000villages per year. In fact, the Plan as it is now envisaged includesRs. 673 million in West Pakistan alone for distribution and villageelectrification. This program, according to the Pakistan Government, will

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be related to the tubewell irrigation program and no village is to beelectrified unless it is reasonably close to a tubewell plumping station.The Mission is of the opinion that a certain amount of rural electrifica-tion might be justified in this manner but only after very detailedplanning is available. The Mission found no evidence that this has beenthe case.

Electric Suoply in Karachi

11. The supply of electricity to the Karachi area involves sub-stantially different problems from those in the rest of the country. It isunder separate management, having its own autonomous public utility corpora-tion controlled by a Board of Directors representing both the Center Govern-ment and private interests, the Government having acquired a controllinginterest in 1952. The basic facilities of the company consist of some olddiesel units, an old steam plant with an installed capacity of som.e 23,000kw ("A" station) and a newly completed 30,000 kw plant ("B" station)financed with the help of the IBRD. In addition, diesel capacity amountingto 15,000 kw is now being installed with the assistance of Bank financing,and should be in full o-oeration wiithin a few months. The Bank is alsoassisting the extension of the "B" station by 60,000 kw which is now underconstruction and should be completed by the middle of 1962.

12. The expansion of these facilities although substantial has notkept oace with demand. The market area has undergone fundamental changesince Partition, with the population growing from 500,000 to 1,916,000.Although the company has made a significant effort to satisfy the mosturgent demand by absorbing some 55,000 new customers over the period andalso supplying an average level of consumption per customer which in-creased from 590 kwh to 2,600 kwh. Nonetheless, the backlog of demand hascontinued to be large. The company's sales grew at an annual rate of wellover 20% over the twenty-year period since 1940 which is almost an un-precedented growth performance in an industry where growth is commonplace.

13. This growth performance was achieved despite the existence ofsevere restrictions on the use of electricity throughout most of the pastdecade. Up until 1956 no residential connection could use more than a60-watt bulb for lighting. New connections for both industrial and resi-dential use had to be sanctioned by the Government. Load-shedding has beencommon and wherever possible, loads have been shifted to off-peak hours.Despite these limitations, the peak load had grown tenfold between 1940 and1960, and is expected by the company to absorb fully the entire firmgenerating capacity that will be available to the system after the 15,000 kwof new diesel units are installed. The company expects that the demand willcontinue to be unsatisfied until additional capacity comes on the line in1962. At that time, firm capacity will be increased to 110,000 kw, per-mitting the company, for the first time, to meet necessary demand and alsohave sufficient capacity in reserve to allow for the carrying out of normalpreventive maintenance. On the assumption that once restrictions are re-moved, capacity will continue to grow with demand, the company's conoult-ants estimate, after a very careful survey of the power market, that by1965, demand will have reached the neighborhood of 175,000 kw and around275,000 kw by 1970.

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Table 3: ACTUAL AND ESTEvIATED SALES, NUMBER OF CUSTOIHERS, IMSTALLEDCAPACITY AND PEAK LOAD IN KARACHI

InstalledNumber of Sales in Capacity MaximumCustomers Million in '000 Load in

Year in tO00 kvjh kw t000 kw

1940 26.9 15.8 60o 52319h7 32.8 25.5 n.a. 8.01950 35.0 L0.2 n.a. 1065195h 8.2 86el 25.5 21.61956 62s.0 125.6 55O5 30651958 81.7 196.6 55,5 470 61959 88.o 227 5 55.5 49..91960 n.a. 250.01/ 63.0 1/ 54h0

Estimates1961 100.0 330.0 70.0 60o01962 110.0 Lh0.0 1300 90,01965 140h0 850.0 26o0o 175.01970 180.0 1,300.0 n.a. 275.0

1/ Preliminary totals.

1h. The mission has not had the opportunity to study these estimatescarefully but in general they seem reasonable in view of the continueddeveLopment taking place in the Karachi area. In fact, even if all con-swners are satisfied as is expected in the company's planning, in theperiod immediately after 1965, less than half of the homes in the city ofKarachi would be connected to central electricity supply. The Mission isimpressed with the estimates that assume that even after the constructionof the new 150,000 kw "C" station shortages might well continue throughmuch of the next decade, especially if industrial growjth continues as ithas in the past. Industrial and commercial consumption have typically ac-counted for over 50% of electric sales in Karachi. A survey of a group oflarge industrial power consumers in Karachi recently showed that they haveincreased their captive generating facilities from 15,000 kw in 1957 toover 30,000 kw in 1960. The Aission still found many industrialists com-plaining of the shortage of pouer. iMiost of these consumers seem to want tc)be supplied from the central Karachi system and have expanded their ownfacilities only because of the severe shortage that exists.

15. The shortage of electric capacity is clearly one of the mostserious problems affecting Karachi. It can only be met by the maintenanceof a financially and technically sound electric company in the city. Thereare difficult problems to be overcome. As in all other parts of Pakistan'selectric supply industry, finding experienced personnel to handle the ex-panded facilities wvihich are being installed is almost impossible. It has

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been found that it is impractical to expect to recruit an entire staff ofmen of suitable qualifications and exeerience in Pakistan to operate andmaintain such facilities. Employing suitable toP engineering people isone of the key problems which must be solved if a satisfactory electricsupply system is to be maintained. The 1i,ission was not fully encouragedthat enough progress is being made in finding sufficient people to carryout the programs that are now already underway.

1WLAPDA - The iviain Power Authority

16. Until quite recently responsibility for electricity supply for thelargest part of the area outside of Karachi in both East and West Pakistanwas vested in the electricity departments of the Provincial Governments.In only a few locations such as Pdultan, Quetta, Rawalpindi and Chittagongwere private companies still operating. In April of 1958, recognizingthe need for centralizing and coordinating power development, a new semi-autonomous agency was organized for Idest Pakistan, called the Water andPower Development Puthority (WAPDA). A similar authority was establishedshortly thereafter in East Pakistan. These organizations were to be re-sponsible for unifying, planning and expanding the power facilities in allof East and W4est Pakistan outside of Karachi. The organizations were tooPerate on conmercial principles setting their own rates at such a levelthat would cover operating costs, interests charges and depreciation, thenayment of taxes (if any) and a reasonable return on investment.

17. The WAPDAs immediately became two of the largest organizations inPakistan with wide oowers in both the fields of water and electricity.Their first task was to prepare two comcrehensive olans for the developmentand utilization of water and power resources of each of the two provincesof Pakistan on a, unified and multipurpose basis. The plans were to orovidefor the generntion, transmission and distribution of power and the con-struction; maintenance and operation of power houses and grids. Althoughthey have only been in existence for a short time both W4APDAs impressed theIMission that they are determined to bring order and reasonable efficiencyinto the chaotic conditions they inherited in this sector. A large numberof consultants have been employed and the ilission feels that in general,they are being effectively used. There are still many problems to besolved but they relate for the most part to specific facilities and are notthe result of deficiencies in overall organization.

-1APDA's West Pakistan Grid

18. WAPDA's West Pakistan grid covers a triangular area enclosed byilultan in the south, Peshawar in the north and Lahore in the east. Itincludes most of the potentially large power markets in W-lest Pakistan out-side of Karachi. The current levels of consumotion in this region areequally as lowJ as that in Karachi with such cities as Lahore, Peshawarand Lyallpur having peak loads ranging between 20,000 kw and 26,000 kw.The entire area is also the center of a substantial non-residential loadwith large areas under Dump irrig^tion and industrial loads expected to

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develop quickly. The grid covers an area already having a population ofmore than 30 million. Electric sales in the area have increased over twelve-fold in the last 12 years. The largest part of the growth has been inindustrial and commercial sales, although irrigation consumption had be-come quite significant during the past four or five years. The peak loadof the system has grown from 27,000 kw to 115,000 kw since Partition or atan annual rate of about 13%. The number of customers has grown from58,700 to 275,500. All of this growth has taken place in the midst ofrestrictions with an inadequate transmission and distribution network.Now that restrictions are being removed and major Darts of the transmissionnetwork approach completion, the load is beginning to grow even morerapidly. It increased from 115,000 _kw to 160,000 kw during 1960.

Table 4: ELECTRIC CONSUMPrTION AND NUiv'BER OF CONSUMERS IN WEST PAKISTANGRID ZONE

(Fiscal Years Beginning July 1 and Ending June 30)

S a 1 e s

Number (in million kwh)of Industrial Irrigation

Consumers and and Peak LoadYear in '000 Domestic Commercial Tubewells Total in '000 kw

1947/48 58.7 13.2 33.3 3.4 50.8 271950/51 93.2 24.6 124.8 7.6 158.7 331954/55 137.6 32.0 20o.1 24.0 263.0 701955/56 145.7 43.0 229.4 52.0 326.9 781956/57 175.0 51.3 3h6.0 58.8 h58.8 851957/58 199.0 55.6 29h.3 50.8 503.7 921958/59 2h2.6 68.5 h38.h 60.0 570 h 971959/60 275.5 n.a. n.a. n.a. 630:0 ./ 115

v/ Estimated.

19. The capability of the system to meet its demand has improved sub-stantially during the past year. At the end of 1960, installed capacityamounted to 448,225 kw, and a good part of the system was new. A largenumber of transmission and distribution lines had only recently been con-nected. However, even after all of the facilities now under constructionare completed this will still be a complicated system to manage. Duringthe dry winter months, especially December, iPiultan must recirculate itswater and can only be onerated on its cooling towers because of the short-age of water which reduces its firm capability to 104,000 kw. The systemhas the further disadvantage that 91,000 kw in the grid are "run of theriver" plants with no storage capacity which can only be operated to theextent that water is flowing in the river. In minimum water years, it isestimated that these plants can produce no more than 56,000 kw of firmpower. There is a similar problem at Warsak with its limited storagecapacity only permitting firm power amounting to a fraction of the full

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160,000 kw of capacity. For these reas.ons, the system installed capacityof 4h8,225 kw amounts to little more than a net available capacity of2CO,000 kw in the winter during years of minimum water conditions.,

Table 5: \IST`LLED CAPACITY 4ND FIRMq CAPA;CITY OF THE POW1-ER ST.:ATIONS CONNECTEDTO THE WEST PAKISTA!N GRID IN DECEMBER 1960

(all figures in kw)

Installed Firm CapacityPower Stations Capacity Winter -

MinimumHydroelectric Plallts Summer Wlater Year

Malakand 20,000 20,000 15,000Dargai 20,000 20,000 15,000Rasul 22,000 22,000 11,000Renala 1,125 1,000 1,000Chichoki Mallian 12,000 12,000 69000Shadiwal 12,000 12,000 69000Kurramgarhi 4,000 4,000 2,000Warsak 160,000 160,000 64 000

Steam Electric PlantsShahdara 8,000 8,000 8,000Lyallpur 14,0(0 11,000 11,000Montgomery 8,500 6,ooo 6,000ivMultan 135,000 128,000 10L,000Daudkhel 20,000 75000 7,000

Diesel Electric PlantsLyallpur 10,000 8,000 8,000Burewala 1,600 1,6oo 1,600

Total 448,225 420,600 265,600Less Reserve Capacity 6400o0 64,000 64,000

Net Available Capacity 384,225 356,600 201,600

20. W.APDA has had careful studies prenared of the various ways thesystem can be ooerated to maximize caoability during dry years. It istheir view that during the driest years in the driest month of December,W;arsak could be operated either to provide a base load of 63,000 kw for24 hours a day or 20,000 kw for 24 hours plus 140,000 kw for six hours aday to supply peak energy. Inasmuch as N,APDA's system peak usually lastsonly four to five hours a day, through proper operations the net firmeffective available capacity would be over 300,000 kw. Furthermore, WAPDAalready has advanced plans for the expansion of the capacity of Multan by150,000 kw which net of 13,000 kw for plant losses would make availablefor base load during December's dry season, an additional 137,000 kw. Thusthe firm effective capacity of such a system, with 1,Warsak being used par-tially as a peaking plant, could handle a peak load approaching 450,000 kw,

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say, in late 1963. An additional 80,000 kwvA has also been planned forWarsak but it is doubtful if this could contribute any additional capa-city during the driest years.

210 WAPDA has been studying the adequacy of this level of capacity tomeet the load it expects will develoo during the next eight years. Thedemand on the grid is expected, according to the estimates of WAPDA's con-sultants, to be 445,000 kw by mid-1964 which the system would be capableof handling. There would be adequate reserve for meeting emergencies.The years after 196L, according to W4APDA, present a problem. I,hether itis assumed to be some time in 1965 or in 1966 or even in 1967, demand isexpected to exceed capacity. WAPDA's consultants estimate that the loadwill reach 675,000 kw by 1968, whereas it will not be until 1968 that the300,000 kw of new capacity of the hlangla Dam of the Indus Basin SettlementW,Jorks will become available. WTAPDA poirnts out that there will be a poJcT-rgap between the years 1964-1968 w[hich must be filled.

22. WAPDA has proposed two alternative solutions for meeting this gapneither of which is included in the Second Plan. A large hydro developmentcould be constructed at an excellent site called Kunhar in the north with afirst stage capacity of 200,000 kwi at a cost of Rs. 480 million with anestimated comnletion date of 1965. The alternative, according to W11APDA,would be to build a new thermal station someplace in the neighborhood ofLyallpur along the line of the projected northern gas pipeline extension.The cost of such a thermal plant would be about one-third of the cost ofthe first stage of Kunhar. The hiission is of the opinion that the ad-vantages of a thermal approach for meeting "the gap" far outweigh those ofthe hydro. Recent reports indicate that the Pakistan Government has ruledagainst Kunhar as far as the Second Plan is concerned.

23. There is some doubt as to whether the load in this area willactually grow as rapidly as WJAPDAts consultants assume. For example,included in the load estimates is an additional 25,000 kw each year forthe electrification of 1,000 villages. It is also estimated that 1,000new tubewells will be added each year and will need an additional 25,000 kwper year. It is doubtful that all of these developments will take place asprojected. If the growth rate is slower then the size of the power gap maybe substantially lower. In any case, the Mission believes that preliminaryplanning for a new thermal station should begin at once. Gas should beavailable at Lyallpur according to the latest estimates well before 1964.The timing and size of such a thermal station could be related to the waythe load actually does develop during the next year or so. The Missionbelie!ves that it is very possible that the gap may not materialize until1966 and that it may be quite a modest one, but the cost of failing tomeet demand is so great that some additional expansion mlust be plannedduring the Second Plan period.

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2)4. Related to the system's expansion is the universal problem of theshortage of technically qualified personnel able to operate and maintainthe equipment now being installed. WIAPDA only has a limited number of

experienced engineers and mechanics. Many of thcse that have experiencehave worked little with the relatively high pressure equipment that hasjust been installed at Multan. Load dispatching may also be a difficultproblem with the new long distance transmission lines and the balancing of

hydro with thermal in the enlarged system. The Mission is of the opinionthat it may be necessary to obtain a number of experts from outside thecountry to assist in the operation of the system during the next two or

three years. This will be especially important as Multan is expanded andother new thermal plants are installed.

The Isolated Systems of ITest Pakistan

25. In the areas ouside of lIAPDAls grid zone, a program is underwayfor the installation of new central generating facilities and the establish-ment of separate local transmission networks surrounding the cities ofSukkur, Hyderabad and Quetta. These are regions at a stage of power develop-ment earlier than the rest of West Pakistan. The three areas together nowhave a total of only around 16,000 kw of installed capacity.

Upper Sind (Sukkur)

26. The Sukkur region has an installed capacity of some 3,500 kf witha peak demand in 1960 of 1,700 kwo The growth in electric consumption hasbeen quite modest from 1.3 million kwh in 1955/56 to 2.8 million kwh in1959/60. The Second Plan proposes a very rapid increase in electric facili-

ties in this area allocating an amount of over Rs, 50 million for a thermalpower station of 30,000 kw as well as sufficient transmission and distribu.-tion equipment to cover a 70-mile area. 1;JAPDA's consultants expect the

load -to grow from its present level of 1,700 kw to 17,000 kw by 1965, withthe irrigation load itself reaching nearly 7,0OC kw. The load would thenbe expected to continue to grow to 25,000 kw by 1970. On the basis ofthese esti:inates, the 30,000 kw plant that is soon to be placed under con-struction, probably will be more than adequate for the next decade. Fuel

supply is no problem with Sui gas readily available.

Lower Sind (Hyderabad)

27. The Lower Sind region around Hyderabad is somewhat more developedelectrically with nearly 9,000 kw of installed capacity and a current peakload of about 5,240 kw. The growth in consumption has been reasonablyrapid during the First Plan period increasing from 15.8 million kwh to26.6 million kwh, Estimates made by 1WTAPDA's consultants indicate that if

it were not for restrictions, the current demand probably would be in theneighborhood of 17,000 kw. It is forecasted that demand will be about28,000 kw by 1965 and over 50,000 kw by 1970. A new 15,000 kw thermalstation to be fired by Sui gas was completed recently and extension tothis station is included in the Second Plan at a cost of some Rs. 20 million0

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Table 6: THE INSTALLED AND FIRM CAPACITY AND PEAK DEMEIAD OF THE POWER STATIONSIN THE ISOLATED SYSTEM! IN JEST PAKISTAN IN 1960

(in kw)

Installed Firm PeakRegions Capacity Capacity Demand

Upper SindSukkur (Private) 184o 1330 990Jacobabad 6ho 400 250Kambar 104 55 50Khairpur 270 195 150Tharushah 140 85 60Dadu 300 225 138Carhi Yasin 165 110 45Kot Diji 70 70 20

Total 3529 2470 1703

Lower SindHyderabad 5000 3700 3200Tando Mohd Khan 165 110 110Nawab Shah 710 500 260Mirpur Khas 1020 700 420Jamshero 1760 1000 1000Tando Adam 300 250 250

Total 8-55 72_ 7270

QuettaQuetta (Private) 2796 2300 1900Chaman, Fort Sandeman,Mach & Sibi combined o0o 325 180

Kalat 60 60 36Total 325 2-685 2118

The Baluchistan Area (Quetta)

28. This part of the country is also at an early stage in its powerdevelopment. The present capacity in the Quetta area is around 3,250 kwwith a peak load of slightly over 2,000 kw. The Quetta plant now being usedis very old and obsolete. Under the Second Plan, a new 15,000 kw steamstation is to be installed based on locally produced coal. An allocationof some Rs. 37 million have been included in the Plan for this plant. Theproject is now awaiting a solution to the problem of providing cooling waterwhich must be solved before construction can get underway. WAPDA's con-sultants estimate that the load in this region (some 40 to 50 miles aroundQuetta) will grow to 18,000 kw by 1965 and 28,000 kw by 1970. The Missiondid not attempt to evaluate these load estimates or the justification ofthe program itself.

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The Village Electrification Program

29. The original Second Five-Year Plan included an allocation ofRs. 246 million for distribution facilities for West Pakistan alone. It is

now proposed to increase this arount by Rs. 427 million for villageelectrification. Electricity is to be installed in some 1,000 villageseach year over the Plan period. The Mission is of the opinion that somevillage electrification must, undoubtedly, be carried out inri.ediately.However, the cost of rural electrification will obviously be widely dif-

ferent in the different parts of the country. The timing of electrifica-tion and the location of each village must depend in each case on the

economics of supplying power to particular tubewell irrigation projects.If a village is located near a tubewell in which electricity is to be in-

stalled, there may well be justification for irmmediate electrification of

the village. The MIission did not feel that it has received enough infor-mation concerning individual schemes to make anything but a most preliminaryjudgment in this matter. It does, however, feel that the informationpresented is quite inconclusive and that there is a prima facie case forproceeding with this whole program only very slowly. The low populationdensity in most of the areas where electrification is to take place intro-duces an element of economnic doubt into the program. The nwnber of con-sumers that WAPDA expects will take electricity once it is brought to the

villages seems to the Mission to be way out of proportion to what can be

achieved. If results are as WTAPDA has assumed, the number of electric con-

sumers in each villace electrified within five years after electricity isbrought to the village would be quite near the present level of Karachi.

The Mission feels this is overly optimistic and does not recognize the dif-ference in income level between the villages and the larger urban areas.

The Electric Supply Industry in East Pakistan

30. As in West Pakistan, the growth in electric facilities since 1947has been unusually rapid. Utilities in the nublic service had only about7,000 kw of installed canacity at the time of Partition. This was increasedto 105,000 kw by the end of 1960. Even including some 15,000 kw which were

privately-owned by industrial establishments, in 1947 there were less than

25,000 kw of capacity in East Pakistan, compared to 188,000 at the end of

1960. Actual sales of energy by public utilities grew from 77 million kwh

at the start of the First Plan period to 166 million kwh by the end of the

period. Commercial and industrial enterprises accounted for 85% of this

consumption.

31. Some Rs. 288 million had originally been allocated to the EastPakistan part of the Second Plan piower pro gram and this has been revised

upward to Rs. 328 million. Most of this amount is intended to covertransmission and distribution facilities to connect stations that areeither now complete or will soon be completed. The Plan anticipates a

156,000 kw increase in generating capacity in East Pakistan consisting of

120,000 kw at the Kaptai hydro station on the Karnaphuli River and a

36,000 kw installation at the Fenchuganj fertilizer plant. Both of these

projects are far advanced and should be completed early in the Plan period.In the field of transmission and distribution, Dacca. and Chittagong are to

be connected to the new Kaptai station by a high-voltage transmission line

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which should also be completed early in the Plan period. The northeast partof the province will be brought into the same grid by a high tension lineto the Sylhet area which wili connect to the Fenchuganj power plant. Anothergrid will be established with the installation of a separate high-voltage lineinterconnecting the Goalpara and the Bheramara therrmal stations. A sub-stantial part of this work is already underway.

Table 7: INSTALLED CAPACITY IlN EAST PAKISTAN AS OF 1947 AND 1960(in kw)

Public Utilities Under I n s t a 1 1 e d C a p a c i t yEast Pakistan 14APDA 1947 1960

Bheramara Steam Plant - 8,320Chittagong Diesel Station 600 10,708Dacca (Dhanmandi) Plant 3,000 6,000Goalpara Diesel Units - 8,540Goalpara Steam Plant - 205000Siddirgani Diesel Units - 10,534Siddirganj Steam Plant - 30,000Karnaphuli Construction Diesel Units - 3,582Other miscellaneous Diesel Units 1 54o 3,808

Subtotal WAPDA 101,492Small Public Utilities underPrivate Management 1,579 3,785

Total Public U-tility Capacity 6,719 105,277Captive Industrial Capacity

Khulna Newsprint Mill (PIDC) 16,000Crescent Jute Mill (Khulna) - 2,868Assam Bengal Cement Factory 3,022 7,540Zeal Pak Sugar Mills (PIDC) - 2,295Rangpur Sugar Mills (PIDC) -1,924Thakurgoon Sugar Mills (PIDC) - 2,210Dhakeaweri Cctton Mills 4,620 4,620Muslin Cotton Mills (Kaligan) - 1,624Chittanranjan Cotton Mills 1,150M.M. Isphani Jute Hills 2,4COKarnaphuli Paper Mills - 1h,000Railway Power Houses 5,805 6,683Mohini Textile Mills 700 1,L70Corew and Company Sugar Mills 875 1,055Fenchuganj Construction Diesel - 1,000Miscellaneous 2,86 16,875

Total Captive Plants 17,887 83,714

Total Capacity East Pakistan 24,606 188,991

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East Pakistan Eastern Grid Region

32. It is intended as a result of the Plan that two major grid systemswill ultimately be established in East Pakistan separated by the BhramaputraRiver. In the proposed Eastern grid area, there is now an installed capa-city of over 120,000 kw, and 156,000 kw new capacity will be availableearly in the Plan period with the completion of Kaptai and Fenchuganj.Some 80,000 kw of the existing capacity is relatively new, in fact, lessthan six years old. It is, thus, envisaged that the relatively moderncapacity available to this grid area will amount to more than 235,000 kw,upon the completion of work now under construction. WdAPDA's consultantsforecast peak demand for the major consuming centers east of theBhramaputra at 130,000 kw by 1963 and 228,000 by 1967. The Mission is ofthe opinion that this forecast may prove to be somewhat optimistic. It isbased on an extremely thorough study of the power market, but assumes avery large growth in the consumption of electricity in small towns andvillages. In any case, even if the projected load growth actually

materializes the caoacity that is already in the process of being installedwould be sufficient until the Third Plan period.

Table 8: WAPDA tS EASTERN DIVISION LOAD FORECAST OF jiAXITIVIU DE;ANiD IN 1960,1963 AND 1967

(in kw)

Load Centers 1960 1963 1967

Dacca 32,7L43 h7,41o 87,o35Chittagong Hills 8,636 8,773 9,134Chittagong 15,257 29,734 51,553Sylhet 4,017 38,007 51,380Tippera 1,726 4,177 ll,OlhNoakhali 195 538 4,354Mymensingh 1,993 2,808 9,7L3Other - - °4,°0

Total 64,567 131,447 228,213

33. For the longer term needs of the Eastern grid area, WAPDA hasbeen considering several alternative approaches to expansion. Apparently,hydro possibilities are very limited. Mlore and larger thermal capacitywill have to be built in the future. The largest single unit now inoperation in East Pakistan is only 10,000 kw. The type and location offuture plants will be intimately related to the results of the currentexploration for fuel. Gas is already available as the fuel for one largepower plant at Fenchuganj. Another unit probably could be installed.Subs-tantial peat deposits have apparently been discovered near Tipperaand Sylhet but no further work is being done to develop them. Recentreports indicate coal may be available in East Pakistan. In recent months,

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the Burma-Shell group have apparently found a new sizeable gas deposit atRashidpur in the Sylhet area. The extent of the gas reserves is not yetproven but it does offer the promise that additional future electricfacilities when and if needed could be located in this area.

East Pakistan WrTestern Grid Region

3h. The region west of the Bhramaputra is relatively less populatedand less developed from the point of view of power consumption. Thecurrent installed capacity in this area is about 70,000 kwv whereas thepeak demand as of mid-1960 was only 30,000 k-w. Mluch of the capacity isno more than three or six years old. Some 60,000 kw will clearly be usablefor many years to come. The Plan itself does not include any additionalcapacity for this area. WHAPDA's consultants forecast that the load willgrow to about 47,000 kw by 1963. The existing facilities should thus bemore than adequate to meet the expected demand through the Second Plan period.

35. The longer run problem is pointed up by the WAPDA expectationthat the growth in demand after the Second Plan period will continue to bevery rapid and will reach a level of 115,000 kw by 1967. East PakistanWAPDA has indicated to the Mission that once it becomes clear when a gapmight develop, additional diesel units will be added as they are needed.This, however, is rightly considered to be a. temporary stop-gap arrange-ment. The real longer-term planning would center around three possiblealternatives. Consideration has been given to the feasibility of linkingthe area west of the Bhramaaputra to the Eastern grid transmission net,Crossing the large nurmber of rivers, however, would present formidabletechnical and economic problems. A more promising alternative would be anexpansion of thermal capacity. Conventional thermal could be related tothe development of peat deposits in the general vicinity of Khulna. Seriousinvestigation of the feasibility of using this peat as a boiler fuel hasbeen started. Foreign consultants are in the process of making a detailedsurvey of the extent of the deposits and in the course of discussions, theMission was encouraged that there are good chances that this peat willultimately be suitable for the generation of electricity. There have alsobeen recent reports that coal may be available. If it is not, atomic powerplants may be a feasible alternative. The Mission is not confident thatsmall nuclear plants of the size suitable for East Pakistan will be economi-cal for many years to come. The feasibility of such a small atomic energyplant in East Pakistan might~ however, be usefully investigated.

36. In either case, the continued development of thermal capacitypoints up a most serious problem facing East Pakistan WAPDA. The estab-lishment of a technical training center to develop skilled engineers andoperators in the electricity field has been prepared by WAPDA. Experienceto date at both of the new steam plants at Siddhirganj and Goalpara has notbeen encouraging. The shortage of skilled technicians and maintenanceworkers has already resulted in some breakdowns. The operation and main-tenance of even low pressure steam plant units plus 132,000 kv transmissionlines is a challenge to the limited experience of the engineers and techni-cians available. The lvlission would hope that this training schemes be

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given high priority in future planning and that a serious effort be made

t,o set up a joint program for East and Wllest Pakistan. The Mission feelsthat in the final analysis this is the weakest link in the whole electri-city program.

Table 9: WAPDA'S WESTERN DIVISION LOAD FORECAST OF MAXIMUIM DEIMAND EXPECTEDIN 1960, 1963 AND 1967

(in kw)

Load Centers 1960 1963 1967

Dinajpur 1,300 2,h53 6,616Rangpur 3,416 4,o66 lo,h43Rajshahi 734 1,445 9,012Bogra 588 703 8,524Jessore 288 735 4,010Kushtia 1,410 11,737 18,808Faridpur 322 787 3,o36Barisal 465 71)4 3,783Pabna 787 1,499 6,982Khulna 20,615 22)699 34,948Other _ - 9 000

Total Western Division 29,925 46,838 115,162

The Prospects for Nuclear Energy

370 The question of the fuel alternatives available for power genera-

tion raises the question of the feasibility of atomic energy. It is ex-

pected that hydro projects will continue to increase in cost in PakistanKunhar, if it is ultimately to be carried out, would not be low, cost hydro..,There does not seem to be much really cheap hydro in the colntry especiallyin East Pakistan. Steam plants based on natural gas provide relativelycheap power but natural gas is not available throughout the country. Dieselunits have been found to be very satisfactory but only in special situationssuch as the emergency needs of Karachi or for the fuel-short areas of the

country.

38. Nuclear energy might in the future meet some of the requirements.Since sizeable supplies of natural gas are available over a wide area of

West Pakistan at a cost below Rs. 2.5 per million BTU, it is doubtful if

atomic energy could be competitive during much of the next decade in that

part of the country. It is too early to know what gas reserves areavailable or what is the potential of coal or peat in East Pakistan. Thefeasibility of economical atomic energy will clearly be related to these

developments.

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39. From a practical poi.nt of view, although the economics of smallatomic energy plants in Pakistan is not now encouraging, such plants forspecific locations in the country might be usefully investigated.

Electricity Regulation and Rates

400 T..herever the Mission went in Pakistan, there was criticism thatelectricity rates are too high. The Mission does not believe that thisposition is based on fact. In general, rates are reasonable in comparisonto costs and to comparable rates in most countries. Howeve-., the publiccomplaints are likely to continue since most of the critics had in mind therate levels ruling in India which are artificially low.

41. Partly as an outgrowth of the rate issue, there has been somediscussion towards setting up a regulatory power commission. The Mlissionfeels that at this stage in the development of the industry, in the lightof the very encouraging starts made by both WAPDAs, it would be a mistaketo introduce an additional organization for power regulation.