PAKISTAN

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PAKISTAN

1. GENERAL INFORMATION

1.1. General Overview

Pakistan is situated in South Asia. It lies between 23 and 37 degrees North latitude and 60 and76 degrees East longitude. It is one of the fast emerging developing countries. According to theWorld Development Report 1996, it is currently ranked as the 100th country in terms of its GrossNational Product per capita among the total 132 countries whose profiles are available.

In 1998, the population was about 131.51 million and the population density 165 inhabitants persquare kilometre (Table 1). The growth rate in 1998 was 2.4%.

TABLE 1. POPULATION INFORMATIONGrowthrate (%)

19801960 1970 1980 1990 1996 1997 1998 To

1998

Population (millions) 45.03 59.7 80.23 108.23 125.38 128.42 131.51 2.8 Population density (inhabitants/km²) 57 75 101 1001 158 161 165 2.8 Urban population as percent of total 21 25 23 30 32 31 33 2.0 Predicted population growth rate (%) 1998 to 2000 2.8 Area (1000 km²) 796.1Source: Economic Survey of Pakistan, 1981-82, 1997-98 & 1998-99, Economic Advisors Wing, Finance Div.,GOP.

1.2. Economic Indicators

The historical Gross Domestic Product (GDP) statistics are shown in Table 2 and some basicindicators in Table 3.

TABLE 2. GROSS DOMESTIC PRODUCT (GDP)Growthrate (%)

19801960 1970 1980 1990 1996 1997 1998 To

1998 GDP (millions of current US$) 3,535 9,106 19,326 35,424 58,134 57,852 58,800 6.4

GDP (millions of constant 1990 US$) 6,352 12,207 19,530 35,424 48,387 49,319 51,437 5.5 GDP per capita (current US$/capita) 79 153 241 327 464 450 447 3.5 GDP by sector (%) :

-Agriculture 53 39 30 26 26 25 25 -1.1-Industry 12 21 23 22 22 22 22 -0.1-Services 35 40 47 52 52 53 52 0.6

Source: Economic Survey of Pakistan, 1981-82 , 1997-98 & 1998-99, Economic Advisors Wing, Finance Div., GOP.

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TABLE 3. BASIC INDICATORS

Indicator Period/year

Average annual rate of inflation 1970-80

1980-901990-98

12.14%

6.05%10.98%

Life expectancy at birth 1998 63 yr.Adult literacy rate 1998 44%

Source: Economic Survey of Pakistan, 1998-99, Economic AdvisorsWing, Finance Division, Government of Pakistan (GOP).

1.3. Energy Situation

Pakistan does not have adequate natural energy resources (Table 4). In order to increase theeconomic development and improve the quality of life, Pakistan has to import large quantities of oil tomeet its energy requirements. Pakistan spent about 27% of its export earnings on energy imports in1997-98 and the amount is consistently increasing.

TABLE 4. ENERGY RESERVES

Exajoule

Estimated energy reserves in 1993

Solid Liquid Gas Uranium (1) Hydro (2) Total

Total amount in place 15 1.21 17.98 N/A 13.86 48

Estimated energy reserves in 1996

Total amount in place 58 1.31 15.73 N/A 13.86 89

Estimated energy reserves in 1997

Total amount in place 58 1.18 14.57 N/A 13.86 88

Estimated energy reserves in 1998

Total amount in place 75 1.50 16.16 N/A 13.86 106(1) This total represents essentially recoverable reserves.(2) Equivalent to estimated hydro power potential of 30,000 MW by converting to energy at 50% plant factor and multiplying it by a factor of 10.Source: Energy Year Book 1993, 1996, 1997,1998, Ministry of Petroleum and Natural Resources, GOP.

The main sources of energy supply in Pakistan are oil and gas which together constitute morethan 80% of total commercial supply. The contribution of coal is very small (about 5.6%), and that ofnuclear and LPG, virtually negligible. During Pakistan’s Eighth Five Year Plan (1993-1998), energyconsumption increased at a rate of 5.9% per year compared to a Gross Domestic Product (GDP)growth rate of 7%. The historical energy statistics are given in Table 5.

1.4. Energy Policy

During the Eighth Five Year Plan (1992/93 - 1997/1998), a comprehensive energy strategy wasfollowed, emphasizing a greater reliance on market forces and private sector involvement due topaucity of funds in Public Sector. The strategy was defined in several policy documents including:Thermal Power Generation Policy, 1994; Hydel Power Policy 1995; Transmission Lines Policy, 1995;and Petroleum Policy, 1997. The initiatives included financial incentives for private sector participationin power generation and in oil & gas exploration. The strategy also called for a broad programme ofrestructuring and privatization of main public utilities operating in power sector.

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TABLE 5. ENERGY STATISTICS Exajoule

Average annualgrowth rate (%)

1960 19801960 1970 1980 1990 1996 1997 1998 to to

1980 1998

Energy consumption - Total(1) 0.24 0.49 0.77 1.54 2.09 2.10 2.17 6.0 5.9 - Solids(2) 0.16 0.20 0.26 0.40 0.47 0.47 0.48 2.5 3.4 - Liquids 0.01 0.15 0.20 0.49 0.74 0.74 0.79 16.2 7.9 - Gases 0.01 0.11 0.22 0.47 0.64 0.67 0.67 16.7 6.4 - Primary electricity(3) 0.01 0.03 0.09 0.18 0.25 0.22 0.24 11.6 5.6 Energy production - Total 0.06 0.19 0.58 0.83 1.08 1.07 1.11 12.1 3.7 - Solids 0.02 0.03 0.03 0.07 0.08 0.07 0.07 2.1 4.8 - Liquids 0.01 0.02 0.19 0.12 0.13 0.13 0.14 15.9 -1.7 - Gases 0.02 0.11 0.20 0.47 0.62 0.64 0.67 12.2 7.0 - Primary electricity(3) 0.01 0.03 0.16 0.18 0.25 0.22 0.24 14.9 2.3 Net import (import – export) - Total 0.07 0.15 0.17 0.43 0.66 0.64 0.69 4.5 8.1 - Solids 0.02 0.0004 0.00 0.03 0.03 0.02 0.03 - - - Liquids 0.05 0.15 0.17 0.39 0.63 0.61 0.66 6.3 7.8 - Gases 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.0 0.0(1) Energy consumption = Primary energy consumption + Net import (Import - Export) of secondary energy.(2) Solid fuels include coal, lignite and commercial wood.(3) Primary electricity = Hydro + NuclearSource: Energy Year Book 1985, 1995, 1998, Ministry of Petroleum & Natural Resources, Government of Pakistan

1.4.1. Introduction of Independent Power Producers (IPPs):

When the ‘Policy Framework and Package of Incentives for Private Sector Power GenerationProjects in Pakistan‘ was announced by GOP in March 1994, the total installed capacity in the countrywas 10800 MW This capacity was insufficient to meet demand on year round basis, particularlyduring low river flows period, and it necessitated load shedding of the magnitude of 2000 MW duringpeak load hours. An optimistic load projection at the rate of 8% per annum for the next 25 years gaverise to an estimated 54000 MW additional generation capacity requirement up to year 2018. Such anambitious programme could not be financed by the GOP, and therefore, resource mobilization in theprivate sector was essential to meet these development targets.

The GOP had encouraged setting up of private sector Power Projects on BOO (Build-Own-Operate) basis as a matter of policy, but the response was not encouraging. Therefore, a policypackage was devised in March 1994 for attracting overseas investment as well as domestic capital fordeveloping power projects. The lucrative terms, with a high rate of return on equity, attracted a largenumber of foreign investors and created a surplus power situation in the country. The GDP alsoslowed down in the following years and power demand did not grow as predicted. The financialposition of WAPDA was adversely affected due to high tariffs and guaranteed payment to be made tothe IPPs even without taking a single unit of electricity. However, the new IPPs policy of July 1998envisages power generation additions in future through competitive bidding for specific sites and typeof plant and gives priority to indigenous fuel based (hydro and local coal) projects, therefore, theproblem of high tariff would hopefully not be repeated. Efforts are being made to solve the problem ofsurplus power in WAPDA system by rationalizing the tariffs to boost the demand for electricity, andby revival of sick industry. The present policy of the government is not to use public sector funds forpower production, except for hydro generation in limited cases, in the remote regions in the North. Thisindicates that private sector funding will be needed for setting up new nuclear power plants.

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2. ELECTRICITY SECTOR

2.1. Structure of the Electricity Sector

The integrated power system of Pakistan consists of two utilities, namely WAPDA and KESC.Pakistan Atomic Energy Commission (PAEC) owns nuclear power plants which are connected inWAPDA and KESC networks. The IPPs are connected to the national grid at various locations.

• WAPDA (Water & Power Development Authority, Public Sector):

- Planning and Execution of thermal as well hydro generation, transmission, anddistribution of electricity;

- Execution of irrigation, water storage, and soil drainage schemes;- Prevention of water logging and carrying out reclamation of water logged and saline

lands;- Flood control;- Restructuring into 12 public limited companies is underway

• KESC (Karachi Electric Supply Corporation, Limited Co.):

- Majority of its shares are held by the Public Sector. However, privatization isunderway;

- Generation, Transmission and distribution of power to Karachi and Uthal in Sind, andBela district in Balochistan.

• PAEC (Pakistan Atomic Energy Commission, Public Sector):

- Nuclear power project planning and implementation- Operation and maintenance of NPPs- Owns two nuclear power plants:

Ø KANUPP (Karachi Nuclear Power Plant), a PHWR, integrated in KESCnetwork

Ø CHASNUPP (Chashma Nuclear Power Plant), a PWR, nearing completion andwill be interconnected in WAPDA grid

• IPPs (Independent Power Producers)

- Generate electricity, transmission and distribution is the responsibility of utilities.

In WAPDA System:

- HUBCO (1292 MW)- KAPCO (1466 MW)- KEL (Kohinoor Energy Limited) (131 MW)- AES Lalpir (362 MW)- AES Pak Gen (365 MW)

In KESC System

- Tapal Energy Ltd. (126 MW)- Gul Ahmad Energy Ltd. (136 MW)

Figure 1 shows the installed generation capacity of the country by plant type and Table 6provides the installed electricity generating capacity and transmission voltages of the utilities and IPPs.

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FIG. 1 Installed Generating Capacity of Electric Power

TABLE 6. POWER PLANTS AND GRID OF UTILITIES (December 1998)

UtilitiesInstalled Capacity (MW(e)) Transmission

VoltageThermal Hydro Nuclear Total

WAPDA 5082 4826 - 9908 500,220,132 kVKESC 1735 - 137 1872 220,132 kVIPPs 3878 - - 3878 500,220,132 kV

Total 10695 4826 137 15658Source: Energy Year Book 1998, an official publication of Ministry of Petroleum & Natural Resources,Government of Pakistan.

2.2. Decision Making Process

The National Economic Council (NEC) is the supreme economic body responsible for ensuringbalanced development of the country. It was created in December 1962 under Article 145 of theConstitution of Pakistan. NEC is headed by the Chief Executive (President or Prime Minister) of thecountry. Its members include Federal Ministers of economic ministries, the Governors/Chief Ministersof the provinces, and the Deputy Chairman of the Planning Commission. The Planning Commission isthe chief instrument for formulating the national plans.

The Energy Wing of the Planning Commission estimates the energy demand on the basis ofinformation obtained from all utilities. It integrates this information at the national level to formulate aunified short and long term national energy policy.

Within the energy sector, the nuclear power area is handled exclusively by the Pakistan AtomicEnergy Commission (PAEC), which also carries out its own energy studies and suggests to the EnergyWing the proper time for incorporation of new nuclear power units with a view towards ensuring anappropriate mix of resources for electricity generation. The Energy Wing forwards the suggestions tothe National Economic Council. NEC has overall control of planning and approves all plans andpolicies relating to electricity sector development, and makes the energy policy. The ExecutiveCommittee of the National Economic Council (ECNEC) supervises the implementation of energypolicy laid down by the Government.

The Private Power and Infrastructure Board (PPIB) has been set up under the Ministry ofWater and Power to assess, evaluate, and co-ordinate the private sector power generation projects.This policy has made the entire process of setting up power plants by the private sector much simplerand has transformed it virtually into a one-window operation. The Ministry of Water and Power alsolooks after the day to day affairs pertaining to the various utilities and bodies in the energy sector.

0

5 0 0 0

1 0 0 0 0

1 5 0 0 0

2 0 0 0 0

1960 1970 1980 1990 1996 1997 1998

Y e a r

MW

NuclearHydroTherma l

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2.3. Main Indicators

Table 7 shows the historical electricity production and installed capacity statistics in the countryand Table 8 provides energy related ratios. The integrated power system of Pakistan (as of Dec.1998) has an installed capacity of 15,658 MW(e). The installed capacity in WAPDA and KESCsystems are 9,908 MW(e) and 1872 MW(e) respectively. The KESC system comprises solely thermal(including 137 MW(e) nuclear) whereas WAPDA system consists of both thermal and hydel plants(thermal: 5,082 MW(e), hydel: 4,826 MW(e)). The IPPs have an installed capacity of 3878 MW(e).The hydro capacity is largely seasonally dependent, decreasing to about 3,000 MW(e) when the waterlevel in the dams gets low. WAPDA's thermal generation is impacted due to ageing of the plantswhich has reduced the effective generation capacity to approximately 4,340 MW(e). In the pastseveral years, the installed capacity had been insufficient to meet the demand on a year round basis, assuch at different time of the year particularly during low river flows, consumers had to be subjected toload shedding. The magnitude of load shedding was around 2000 MW(e) during 1994 which reducedthe industrial growth and adversely affected the economy.

With a Gross Domestic Product (GDP) growth rate of 6%, and an estimated income elasticityof demand of 1.35 during the period 1998-2013, the annual growth rate of electricity demand till theyear 2013 is forecasted to be 8.1%. The estimated income elasticity of demand then declines to 1.1%in the year 2023, the corresponding annual growth rate of electricity demand will then be 6.7%.

Future electricity demand will have to be fulfilled with new power plants based on imported oil,coal or nuclear power or an appropriate mix of these. PAEC has conducted a number of studies toidentify a realistic role of nuclear power in future electricity supply mix of Pakistan. Based on a studyconducted in 1997 for the working group on energy for the ninth five year plan, power capacityrequirements of the country would increase to about 31,000 MW(e) by the year 2010 and some 68,000MW(e) by the year 2020. Projected power requirement and estimated generation mix for the yeas2010 and 2020 are shown in table 9.

2.4 Impact of Open Electricity Market in Nuclear Sector

The power generation in Pakistan, like most of the developing countries, was being carried out inthe public sector. Pakistan had vertically integrated utilities which were responsible for generation,transmission and distribution of electricity. The model for unbundled competitive electricity marketwhich was first adopted by the British government in 1988, is being adopted and implemented withsome variations of the same system. This approach was also favoured, especially by the cash-starvedgovernment, since the large amount of capital required for expensive power generation projects wasnot available.

2.4.1. Privatization of Power Sector in Pakistan

The strategic plan for privatization of power sector was approved by the government in July1992. The plan calls for restructuring and privatization of electric power industry in the country, and itseeks to meet the prime goal of providing the greatest possible role of private sector, and the progresstowards a fully competitive sector in future. The plan is structured to meet three key objectives:

1. Enhance capital formation for power sector from private sources, outsides the Govt. Budget andwithout sovereign guarantees;

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TABLE 7. ELECTRICITY PRODUCTION AND INSTALLED CAPACITY

Average Ann.Growth Rate

(%)

1960 19801960 1970 1980 1990 1996 1997 1998 to to

1980 1998

Electricity production (TWh) - Total(1) 1.10 6.46 14.89 37.94 58.59 60.36 60.95 13.9 8.1 - Thermal 0.59 3.54 6.17 20.72 34.90 39.16 38.52 12.5 10.7 - Hydro 0.51 2.92 8.72 16.93 23.21 20.86 22.06 15.3 5.3 - Nuclear 0.00 0.00 N/A 0.29 0.48 0.35 0.38 - - - Geothermal 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.0 0.0 - Wind 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.0 0.0 Capacity of electrical plants (GW(e)) - Total 0.42 1.72 3.50 7.86 12.99 14.82 15.66 11.2 8.7 - Thermal 0.17 1.05 1.79 4.83 8.03 9.86 10.70 12.5 10.4 - Hydro 0.25 0.67 1.57 2.90 4.83 4.83 4.83 9.6 6.5 - Nuclear 0.00 0.00 0.14 0.14 0.14 0.14 0.14 - 0.0 - Geothermal 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.0 0.0 -Wind 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.0 0.0

(1) Electricity losses are not deducted.Source: WAPDA, Power System Statistics, Twenty first issue, March 1997. Energy Year Book 1998, an officialpublication of Ministry of Petroleum & Natural Resources, Government of Pakistan.

TABLE 8. ENERGY RELATED RATIOS1960 1970 1980 1990 1996 1997 1998

Energy consumption per capita (GJ/capita) 5 8 10 14 17 16 17

Electricity per capita (kWh/capita) 24 108 186 351 467 470 463 Electricity production/Energy production (%) 20 35 27 48 57 59 58 Nuclear/Total electricity (%) 0 0 0.5 1 1 1 1 Ratio of external dependency (%)(1) 30 30 22 28 31 30 32 Load factor of electricity plants - Total (%) 30 43 49 55 51 47 44 - Thermal 40 39 39 49 50 45 41 - Hydro 23 50 64 67 55 49 52 - Nuclear - - N/A 24 40 29 31

(1)Net import / Total energy consumption.Source: IAEA Energy and Economic Data Base; Country Information.

TABLE 9. PROJECTED REQUIREMENTS OF ELECTRICITY GENERATION CAPACITY(MW(e)) IN THE YEARS 2010 AND 2020

2010 2020Projected Capacity 31,000 68,000Expected Capacity Hydro 11,142 14,502 Gas (including imports) 11,884, 27,516 Indigenous Coal 1,150 1,150 Nuclear 3,995 11,125 Total 19,521 54,293Shortfall 2,829 13,707

Source: ‘Electricity and Energy Demand Projections for Pakistan up to the Year 2023’, A paper prepared for theworking group on energy for the ninth five-year plan, ASAG, PAEC.

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1. Improve efficiency of power sector through competition, accountability, managerial autonomy, andprofit incentives;

2. Rationalize electricity prices and social subsidies, while maintaining certain socially desirablepolicies such as Rural Electrification and low income “Lifeline” rates.

2.4.2. Restructuring of WAPDA

The GOP is implementing a programme for restructuring of Pakistan Power Sector (PPS). Theprogramme involves the corporization and commercialization of existing facilities into operatingsubsidiaries of WAPDA. Therefore, the Power Wing has been restructured into following 12 publiclimited companies:

• Distribution Companies: 8• Generation Companies: 3• National Transmission and Despatch Company (NTDC): 1• Pakistan Electric Power Company (PEPCO): 1

The Electric Supply Agreement, Business Transfer Agreement and Operation & DevelopmentAgreement were signed by WAPDA and Chief Executives of all companies on 29/30 June, 1998. Allthe eight distribution companies are functioning independently through their Board of Directors sinceJuly 1, 1998. All thermal power units have been converted into three corporated companies, namely JamshoroPower Company Ltd. (GENCO-1), Central Power Generation Company Ltd. (GENCO-2) andNorthern Power Generation Company Ltd. (GENCO-3). A National Transmission and Despatch Company (NTDC) responsible for operation oftransmission and grid system network of 500 kV and 220 kV was corporated on 6th November 98. Originally PEPCO was to be created as WAPDA Holding Co. but as per present scenario, itwill be a Management Company and has been incorporated with Corporate Law Authority. 2.4.3. Power Tariff Rationalization There are a few realities which have imposed commercial imperatives on WAPDA. First, theelectricity has become expensive and there is rising trend among big consumers to generate their ownelectricity which is cheaper and free of corrupt hands. Second, the political leadership for obviousreasons averse to increase power tariff. Third, India wanted to purchase electricity lower than itsproduction cost. Finally, there will be approximately 3000 MW surplus electricity in the year 2000when five IPPs and Chashma nuclear will get into production. These hard realities forced WAPDA todevelop commercial outlook and necessitated power tariff rationalization. With a view to increasing thenumbers of consumers, decrease in power tariff has been proposed giving main relief to industrial andagricultural consumers. WAPDA management has expressed the optimism that by attracting moreconsumers, they would be in a position to generate more revenues. 2.4.4. National Electric Power Regulatory Authority (NEPRA) National Electric Power Regulatory Authority was established after the promulgation of theOrdinance in 1995. The functions of NEPRA generally include grant of licenses to Companies, tariffsetting and approval, monitoring quality of service and protection of consumer’s as well as investors’interests.

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3. NUCLEAR POWER SITUATION

3.1. Historical Development

Pakistan's fossil fuel resources have remained limited while its hydro resources show seasonalvariation and are confined to the northern part of the country. This fragile resource base has made itessential for Pakistan to opt for nuclear power generation. Pakistan started construction of its first Nuclear Power Plant (KANUPP) in 1966 at Karachiand commissioned it in 1971. The contract for a turnkey project of 137 MW(e) CANDU (PHWR)reactor was awarded to the Canadian General Electric (CGE). In 1975, Canada refused to authorizesupply of more fuel and spares for this plant due to nuclear non-proliferation concerns. Thereafter,Pakistan Atomic Energy Commission undertook fuel fabrication on an emergency basis and has beenproducing locally made fuel since 1981. Work is in progress of Pakistan's second Nuclear Power Plant at Chashma, which is a 325MW(e) PWR being supplied on turnkey basis by China. 3.2. Status and Trends of Nuclear Power

At present the nuclear power provides only about 1% of electricity generation in the country.This power is generated by a Canadian manufactured 137 MW(e) PHWR, Karachi Nuclear PowerPlant (KANUPP). In 1992, Pakistan awarded a turnkey contract to China for the construction of a325 MW(e) PWR, which is an improved version of the Qinshan unit put into operation in China in1991. The construction work at this Chashma Nuclear Power Plant (CHASNUPP-1) started inDecember 1992. Commissioning of this plant is in progress and connection to grid is expected in thenear future. Discussions of supplying a second Qinshan type plant are under way. Table 10 providesthe status of nuclear power plants in the country.

TABLE 10. STATUS OF NUCLEAR POWER PLANTS

Station Type Net Operator Status Reactor Capacity Supplier

KANUPP PHWR 125 PAEC Operational CGE CHASNUPP 1 PWR 300 PAEC Under Constr. CNNC CHASNUPP 2 PWR 300 PAEC Planned

Station Construction Criticality Grid Commercial Shutdown

Date Date Date Date Date

KANUPP 01-Aug-66 01-Aug-71 18-Oct-71 01-Oct-72 CHASNUPP 1 01-Aug-93 30-Mar-00 30-Apr-00 30-Aug-00 CHASNUPP 2

Source: PAEC 3.3. Current Policy Issues

Pakistan was among the first few developing countries to enter the field of peaceful uses ofnuclear energy for power generation. Unfortunately, development of nuclear power in the country wasconstrained due to shortage of financial resources and a low level of technical expertise available.However, this situation has improved considerably as a result of many years of a sustained andrigorous programme of training, research and development in the nuclear field. Pakistan now has thetechnical capability to take on increased domestic role in nuclear power plants . In order to achieve thisobjective in a manner that would gradually lead to a high degree of self-reliance, PAEC is nowpursuing simultaneously two plans encompassing short term and long term horizons.

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The short term plan envisages construction of nuclear plants with foreign assistance with a viewto alleviate power shortages. It is planned to purchase proven type of commercially available plants ofstandard design at reasonable financing terms, ensuring full participation of PAEC and local industryfor maximizing transfer of technology. With increase in local capability for design & engineering,construction and manufacturing it is intended to shift gradually from turn-key to two-package approachto multiple package contracts for subsequent plants.

The long term plan aims at systematically developing local capability, in close co-operation with

supplier countries, leading progressively to increase indigenous design, engineering and manufacture ofnuclear power plants together with their components and fuel. 3.4. Organizational Chart

Figure 2 shows the organizational chart for nuclear energy development in Pakistan. Established as Pakistan Atomic Energy Committee in 1955, the Ordinance for Pakistan Atomic

Energy Commission was made and promulgated by the President of Pakistan on 27th May 1965 whichwas later on approved by the National Assembly on 21st July, 1965. PAEC was established for thepromotion of peaceful use of atomic energy in the country, the discharge of international obligationsconnected therewith, the execution of development projects involving nuclear power stations andmatters incidental thereto.

PAEC has a Chairman and four full-time working members (representing finance, technical,

power and administration), and four part time members, appointed by the government of Pakistan(GOP). PAEC reports to the Pakistan Atomic Energy Council consisting of 22 members and headedby the Minister in charge of Atomic Energy. Since the inception of PAEC, this portfolio has alwaysbeen retained by the various Prime Ministers of Pakistan or by the Executive Head of the government.

The functions of the PAEC are to do all acts and things, including nuclear research work,

necessary for the promotion of peaceful uses of atomic energy in the fields of agriculture, medicineand industry and for the execution of development projects including nuclear power stations and thegeneration of electric power. In the performance of its functioning the Commission is guided by theinstructions, if any, given to it by the GOP. PAEC may, subject to prior approval of GOP, co-operatewith foreign national authority or international organization in respect of peaceful uses of atomicenergy. PAEC also represents Pakistan's membership in IAEA.

4. NUCLEAR POWER INDUSTRY 4.1. Supply of Nuclear Power Plants 4.1.1. Policy and Strategy Pakistan aims at indigenization of its nuclear power programme to the optimum level in order toreduce over-dependence on imported plant and fuel, conserve the precious foreign exchangecomponent and lower overall cost, while raising level of nation’s industrial and technological base.PAEC is pursuing short term as well as long term plans to achieve this objective in a gradual and wellco-ordinated manner.

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PIEAS

PINSTECH CHASNUPP

INUP

KNFC

KANUPP

Agritculture Centres

Medical Centres

Exploration, Mining & Refining

Member MemberMemberMemberTechnical Power Administration Finance

ChairmanPAEC

Pakistan AtomicEnergy Council

KINPOE

ICCC

Abbreviations:• PIEAS: Pakistan Institute of Engineering and Applied Sciences• PINSTECH: Pakistan Institute of Nuclear Science and Technology• KINPOE: Karachi Institute of Nuclear Power Engineering• KANUPP: Karachi Nuclear Power Plant• CHASNUPP: Chashma Nuclear Power Plant• INUP: Institute of Nuclear Power• KNFC: Kundian Nuclear Fuel Complex• ICCC: Instrumentation, Control and Computers Complex

FIG. 2. Organizational Chart for Nuclear Energy Development in Pakistan

4.1.2. Achievements PAEC started nuclear power planning activities since early 1960s and has now developedexpertise in energy forecasting, power plant economics, generation expansion and electric powersystem analyses, and pre-project planning (e.g. economic and financial analysis, feasibility studies, biddocument preparation & evaluation, etc.). Design and Engineering of NPP was initiated in 1980 and a formal Design & EngineeringDepartment (DED) was set up within CHASNUPP in 1985. Over 100 engineers trained in Europeand China have actively participated in the design, design review, PSAR and FSAR preparation &review of CHASNUPP and have developed architect engineering capability. PAEC has already developed non-destructive testing (NDT) and quality assurance (QA)capability. The National Centre for Non Destructive Testing (NCNDT) and Pakistan Welding Institute(PWI) have been set up and PAEC has trained a large number of personnel in public and privatesector.

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The development of infrastructure facilities at CHASNUPP site and civil construction of allplant building/structures outside nuclear and conventional islands, including intake & outfall structuresetc., was carried out by local industry. In future plants, civil works will be mostly carried out by localindustry with sizeable contribution in installation activities as well. Some local manufacturing capability exists in the public and private sectors for themanufacturing of thermal power plant boiler components, heat exchangers and electrical equipment. InPAEC, modest efforts have been made to look after instrumentation and control, material, nuclear fuelcycle facilities and manufacture of spares for KANUPP. A Full Scope Training Simulator forCHASNUPP has also been developed by PAEC with the technical assistance of Chinese experts inaddition to manufacturing of several vessels, tanks and piping etc. 4.2. Operation of Nuclear Power Plants

PAEC is responsible for operation and maintenance of nuclear power plants in the country. TheNCNDT supports the quality assurance programme for nuclear power plants, particularly concerningthe in-service inspections for selected components of KANUPP. The PWI provides guidance in theapplication of relevant codes and standards and for improvement of the quality of welding in thecountry. Other PAEC research centres (e.g., PINSTECH) provide valuable backup research andanalytical services as required.

4.3. Fuel Cycle and Waste Management Service Supply PAEC initiated nuclear fuel cycle activities with a modest prospecting programme in early1960s. A number of promising areas were located some of which are presently being explored. Uranium ore has been mined and the first ore processing plant using this indigenous ore has been inoperation for some time. Essential laboratory facilities have also been set up to support the explorationand ore process development work. Kundian Nuclear Fuel Complex (KNFC) has the facility for fabrication of fuel for KANUPP. Appropriate radioactive waste management systems have been designed for KANUPP andCHASNUPP to remove radioactive liquid, gaseous and solid wastes arising from the plant. Theseradwaste management systems collect, store, allow sufficient radioactive decay and process the wastethrough filtration, ion exchange, evaporation, solidification, vitrification and drumming. Sufficient storage capacity is provided for the entire fuel discharged during the life of the plant.High level liquid wastes will be suitably located and converted into solid wastes. These solid wasteswill be packed in standard drums for storage and subsequent removal to off-site disposal facilities forpermanent burial. 4.4. Research and Development Activities Research Reactors Facilities PARR-1 Swimming Pool 10 MW AMF, USA PARR-2 Tank in Pool 30kW CIAE, People's Republic of China Research Institutes/Centers • PINSTECH (Pakistan Institute of Nuclear Science and Technology)

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− Basic/Applied Research in Physics, Chemistry, Materials, Safety, Radioisotope Applicationsand Radiation Protection

• PIEAS (Pakistan Institute of Engineering and Applied Sciences)

− (Formerly CNS - Center for Nuclear Studies or Reactor School)− Reactor Safety, Instrumentation & Control (Master and PhD Degree Courses in Nuclear

Engineering, System Engineering and Nuclear Medicine) • KINPOE (Karachi Institute of Nuclear Power Engineering)

− Master’s Degree in Nuclear Power Engineering, Diploma Course for technicians • INUP (Institute for Nuclear Power)

− Indigenization and Design of NSSS • ICCC (Instrumentation, Control and Computers Complex)

− I & C of NPP, development of simulators, plant computer systems, etc.

4.5. International Co-operation in the Field of Nuclear Power Development andImplementation

As part of its commitment towards ensuring and continuously enhancing the operating safety ofKANUPP, Pakistan is an active member in various international organizations in the field of nuclearenergy, and exchanges operating data regularly. During the past two years, the Fuel Channel IntegrityAssessment Programme (FCIA) was undertaken with the help of IAEA and Canada. An independentreview of KANUPP steam generators was also carried out under contract by a Canadian utility. AnIAEA seismic safety review mission inspected the plant in 1993. The preliminary findings of the abovemission are eminently satisfactory. The KANUPP is a member of WANO and COG.

The 300 MW(e) Chashma Nuclear Power Plant (CHASNUPP), which is under IAEA

safeguards, is expected to be operational in the near future. The design and safety review ofCHASNUPP was carried out by an IAEA mission in 1993 and Pre OSART in March 1999. PAECshares its operating information with other NPP operators, through IAEA and WANO. 5. REGULATORY FRAMEWORK

5.1. Safety Authority and the Licensing Process

In Pakistan, nuclear regulatory matters are overseen by the Directorate of Nuclear Safety andRadiation Protection (DNSRP), headed by a Director-General. However, the ultimate nuclearregulatory authority, which sets policy and nuclear safety standards, is the Pakistan NuclearRegulatory Board (PNRB). The Board has nine members. This Board is currently headed by theChairman of PAEC who is also a member of PNRB. The Director-General of DNSRP also serves asa member and ex-officio Secretary and as such looks after day to day matters pertaining to nuclearsafety and regulation.

Member Finance and Member Administration of PAEC are also shared by PNRB. Theremaining five Members are eminent scientists/engineers, none of whom can have, by charter, anyexisting connection with PAEC during their tenure on PNRB. This composition ensures that theexternal technical members have the majority vote over the members with PAEC affiliations.

The governmental organization responsible for licensing Nuclear Power Plants and other nuclearinstallations is the Directorate of Nuclear Safety and Radiation Protection (DNSRP). The licensing

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procedure in Pakistan follows the IAEA guidelines and safety requirements. Accordingly, nuclearpower plants in Pakistan are to be designed in accordance with the IAEA-NUSS Rev. 1 issued in1988.

The licensing procedure comprises of following three stages:

• Registration of Site;• Issuance of Construction License;• Issuance of Operating License.

5.2. Main National Laws and Regulations

• Pakistan Nuclear Safety and Radiation Protection Ordinance 1984• Pakistan Nuclear Safety and Radiation Protection Regulations 1990

After the promulgation of the Pakistan Nuclear Safety and Radiation Protection Ordinance in1984, and the Pakistan Nuclear Safety and Radiation Protection Regulations in 1990, preparation ofregulatory documents started in 1990. The first document, prepared in 1990, was the “Procedure forLicensing of Nuclear Power Plants in Pakistan“, which provides the basis for the licensing of nuclearpower plants in Pakistan. Similarly, “Procedure for Licensing of Research Reactors in Pakistan“ wasprepared in 1991.

5.3. International, Multilateral and Bilateral Agreements

Pakistan became a Member State of the International Atomic Energy Agency (IAEA) in 1957and has actively participated in virtually all of the Agency’s activities. Pakistan has benefited from theIAEA’s Technical Assistance and Co-operation Programme (TACP), and has also provided trainingthrough TACP, for many scientists and engineers from other developing countries.

AGREEMENTS WITH THE IAEA

• Technical Assistance related INFCIRC Entry into force:

/34 Research reactor 5 March 1962 /116 NPP Project 17 June 1968

• Safeguards related INFCIRC Entry into force:

/135 Canada 17 October 1969 /239 France 18 March 1976 /248 Supply of U-concentrate 2 March 1977 /393 Supply of miniature 10 September 1991 source reactor from PRC /418 Supply of nuclear power 24 February 1993

Station from PRC

• Improved procedures for designation Prefers the present system. of safeguards inspectors Letter of: 20 December 1988

• Supplementary agreement on provision Entry into force: 22 September 1994 of technical assistance by the IAEA

• RCA Entry into force: 3 September 1987

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OTHER RELEVANT INTERNATIONAL TREATIES etc.

• NPT Non-Party

• Agreement on privileges and Entry into force: 16 April 1963 immunities

• Convention on physical protection Non-Party of nuclear material

• Convention on early notification of a Entry into force: 12 October 1989 nuclear accident

• Convention on assistance in the case Entry into force: 12 October 1989 of a nuclear accident or radiological emergency

• Conventions on civil liability for Non-Party nuclear damage and joint protocol

• Convention on nuclear safety Entry into force: 29 December 1997

• ZANGGER Committee Non-Member

• Nuclear Export Guidelines Not adopted

• Acceptance of NUSS Codes No Reply

• Partial Test-Ban Treaty Signature: 14 August 1963

BILATERAL AGREEMENTS

• Agreement For Providing Assistance China 1992 on Nuclear Safety Review of Chashma Nuclear Power Project

• Agreement For Providing Assistance China 1994in Nuclear Safety Inspections forChasm Nuclear Power Project

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REFERENCES

[1] World Development Report 1994; Infrastructure for Development, Published for the World Bank,Oxford University Press.

[2] Pakistan Energy Yearbook 1994, an Official Publication of the Ministry of Petroleum & NaturalResources, Government of Pakistan, (April 1995).

[3] Economic Survey 1998, Economic Advisor’s Wing, Finance Division, Government of Pakistan,Islamabad, Pakistan.

[4] Pakistan Energy Yearbook 1998 (and earlier issues), Hydrocarbon Development Institute ofPakistan (HDIP), Ministry of Petroleum and Natural Resources, Government of Pakistan,Islamabad, Pakistan.

[5] Power System Statistics (21st and 23rd issues), Planning Department, Power Wing, WAPDA,Lahore, Pakistan.

[6] Energy and Nuclear Power Planning Study for Pakistan, Applied Systems Analysis Group,Pakistan Atomic Energy Commission, 1996.

[7] Electricity and Energy Demand Projections for Pakistan up to the year 2023, A paper prepared forthe Working group on energy for the ninth five year plan, 24th June, 1997.

[8] Energy Indicators of Developing Member Countries of Asian Development Bank, (July 1992).

[9] Seventh Five Year Plan 1988-93 and Perspective Plan 1988-2003, Vol. II, Planning Commission,Government of Pakistan.

[10] Power Sector in Pakistan, Industrial Research Service, Karachi, Pakistan, (1991).

[11] IAEA Power Reactor Information System (PRIS) Data Base of IAEA.

[12] IAEA Research Reactor Information System (RRIS) Data Base of IAEA.

[13] KANUPP Technical Reports and Operating Data.

[14] World Nuclear Industry Handbook, published by Nuclear Engineering International, (1993).

[15] Pakistan Atomic Energy Commission, Newsletters 1992, 1993, and 1994.

[16] Manual for Development Projects: Preparation, Appraisal, Approval, Implementation, Monitoringand Evaluation, Planning and Development Division, Government of Pakistan, (1991).

[17] IAEA Report of the Technical Co-operation Activities in Asia and the Pacific.

[18] Institution of Engineers (Pakistan), Proceedings of 1st International Electrical EngineeringCongress, April 12-14, 1999, Lahore.

[19] IAEA-TA-2478, Report on IAEA Experts Regional Workshop on Effective Strategies forNuclear Power Programme in RCA Countries, Daejon, Republic of Korea, 1995.

[20] IAEA Energy and Economic Data Base (EEDB).

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Appendix

DIRECTORY OF THE MAIN ORGANIZATIONS, INSTITUTIONS AND COMPANIESINVOLVED IN NUCLEAR POWER RELATED ACTIVITIES

NATIONAL ATOMIC ENERGY AUTHORITY

Pakistan Atomic Energy Commission(PAEC) Tel: +92-51-9204276P.O. Box 1114 Fax: +92-51-9204908Islamabad Telex: 5725 ATCOM PKPakistan Cable: ATOMCOM, ISLAMABAD

Directorate of Nuclear Safety andRadiation Protection (DNS&RP) Tel: +92-51-9204417Pakistan Atomic Energy Commission, Fax: +92-51-9204112P.O. Box 1912 Telex: 5725 ATCOM PKIslamabadPakistan