Quaid-e-Azam Solar Park

The project of solar powered park was approved by Government of Punjab, Pakistan on August, 2013.[2] In late 2013, the Canadian Solar Company, signed a contract with Punjab government, for setting up 500 MW solar powered park with $175 Million, however, it was not pursued for unknown reasons.[3] The contract of Phase-1 construction, 100MW project, costing $215, million with $131.15 million as EPC cost and $73 million as O & M cost was awarded to Chinese company, TBEA Xinjiang SunOasis Co. Ltd.[4] Although, the project was scheduled to completed till March , 2014,[5] however, it was delayed by 9 months due to slow procedural arrangements by Punjab government, and was rescheduled to complete in december, 2014.[6] To negotiate political impact of the delay, a ground breaking was done on May 2014 by prime minister Mian Muhammad Nawaz Sharif, with extended deadline of completion i.e. December, 2014.[7] Chief Minister, Punjab, Shehbaz Sharif showed his concerns over slow progress of the project, he strongly argued to the management of the project that "any delays in the project are unacceptable".[8] The project was completed in March 2015,[9] and was inaugurated on 5 May 2015 by Prime Minister, Mian Muhammad Nawaz Sharif,[10] in the hefty ceremony at Bahawalpur.[11]

Quaid-e-Azam Solar Park is located in the desert area of Lal Sohanra, Cholistan, Bahawalpur, is the largest solar plant of Pakistan. It produces 100 MW, spans 500 acres (200 ha) and hosts 392,158 solar modules. The project was constructed in 2015, with total cost of $215, million,[4] with major EPC cost of $131 Million, shared by Government of Punjab, Pakistan and Bank of Punjab. The construction of the project was done by TBEA Xinjiang SunOasis Co. Ltd.[12][13]

The initial project plan included 1000 MW , as first phase of project 100 MW was installed. The Phase I, a 100 MW site, is hosting 392,158 solar modules of 255 W_p each, 100 centralised inverters of 1 MW each, 100 transformers of 1 MVA each at 33kV. There are also 2 transformers of 100 MVA each at 132 kV in a 100 MVA substation. The electrical output is being connected to a 132kV transmission line that runs through the Solar Park.[14]

The second phase of project started in September 2015 by issuance of a letter of Intent (LOI) to Zoenergy, a subsidiary of ZTE, Telecommunication giant of China. However, Water and Power Development Authority WAPDA, immediately criticised award of the contract without competitive bidding and completion of the entire process in just one week time.[15] The central contract cell of WAPDA narrated , Entire deal is shrouded in mystery and would create legal and contractual problems for everyone.' Apparently, Zoenergy was not considered for the 100MW, first phase of project construction, attributing it as Telecommunication company. Opposition took the government to Supreme Court of Pakistan in November 2014, on violation of Public Procurement Regulatory Authority (PEPRA) rules and fast track award of the contract.[16] The legal experts Anwar Kamal added, that accepting high risk bank guarantees creating rights for the investor will haunt Punjab government in future. The federal bodies were totally ignored and Punjab government conducted the matter in non transparent way.[15] It was noted that during contract award to Zoenergy, several renowned power firms were ignored and the contract was given to telecommunication firm without any competitive bidding.[17]

Despite all the litigation, a $1.5 billion contract was awarded to Zonergy Company Ltd for 900 MW project to be completed in Phase 2(up to 300 MW) and Phase 3(up to 900 MW) with the aim of approaching planned 1000 MW.[17] In June 2015 Chief Minister Punjab, Shahbaz Sharif announced that 300 MW production will start from end of 2015, and entire 1000 MW production will be commenced by 2016.[18] To follow the operation closely, he appointed Ahad Cheema , a 20th grade officer, who was already working as director general Lahore Development Authority (LDA), as executive officer of the project.[19] In meeting to follow prime minister Mian Muhammad Nawaz Sharif, on July 2015, directed project stakeholders to expedite the work and complete 300 MW production phase by end of 2015, and entire 1000 MW by April, 2016.[20][21] However, Zonergy Company Ltd. was unable to complete any targets , amid different problems and the project was not able to exceed Phase-1 , 100 MW installation.

In January 2017, a Turkish company Zorlu Enerji, also showed their interest to develop 100 MW project in 6 months period at 1000 MW QASP site.[22][23] In february, 2018, Zorlu Enerji again showed their interest in similar venture, however, the project was not able to kick off for unknown reasons.[24]

Quaid-e-Azam Solar Park was unable to produce affordable energy and expected output , due to several reasons:

1. Bahawalpur is desert terrain , having high dust count, therefore , the efficiency of panels were reduced by 40%. It required 30 people to clean panels with 15 days to restore the panels back to their full capacity, which reduced production of installed 100MW plant to below 18 MW.[25][26]
2. It required one litre of water to clean, each of 400,000 installed panels. A total 15 days cleaning cycle required, 124 million litres of water enough to sustain 9000 people, while rain in Cholistan desert is rare and far between. Providing such huge amount of water in desert terrain, became a challenging and daunting task for management team. Besides, the manual cleaning methods allowed setting of dust before it was re-cleaned.[26][25]
3. The temperature of Bahawalpur rises above 45 degree celsius,[27] which is much higher than required 25 degree celsius, for efficient solar power production;[28] another reason of reduced 18MW production.[29]
4. QASP produced too little too expensive power, in fact, the second most expensive per unit cost after Nandipur Power Project. The upfront capital cost expenditure (CAPEX), $131.15mn ($1.31mn/MWp), was very high like other solar projects , while unlike other solar plants, the plant was unable to achieve balanced recurring operational cost (OPEX) due to low power production against expected 100MW.[30]

Due to all aforesaid, the project faced long-term operational hurdles and conflicts with National Electric Power Regulatory Authority (NEPRA). Despite the fact that Balochistan is more suitable for solar production with more barren land, and suitable dust count.[31] Government of Punjab, Pakistan convinced prime minister that Punjab is suitable venue for solar production. Chief Minister Shahbaz Sharif later accepted that producing 18.5 MW for 13.5 billion is an expensive deal.[32]

MOU signed on July, 2014, determined the tariff of Rs. 14, between Government of Punjab and China.[33] Based on this, National Electric Power Regulatory Authority (NEPRA) granted astonishingly high tariff of Rs. 14 to QASP Pvt. Ltd, while the rest of the world enjoyed solar tariff less than Rs. 4.[34][35] For example, solar prices in India touched INR. 2.42 with decrease of cost in solar production.[36] The interest rate in Pakistan are much lower than India, Brazil, South Africa , Mexico etc , Pakistan offers entire foreign equity and no taxes, and still it has highest solar tariff in the world. National Electric Power Regulatory Authority (NEPRA) in September, 2016 tried to reduced tariff from Rs. 14.5 per unit to Rs 9.25 per unit , maintaining that cost of solar production had reduced sharply in last 4 years, besides it has much lower costs in other parts of the world.[37] However, Zonergy threatened to withdraw from Phase-2 and Phase-3 of project , and insisted Chief Minister Punjab to pressurise NEPRA. After signaling to with draw its commitment of 900 MW extension , she went into litigation over the matter.[38][39] Finally , the scores were settled attributing subsidy contributed by Ministry of Water and Power , however, it added to existing circular debt. and the remaining was transferred to consumer. In February, 2017 Ministry of Water and Power accepted that Rs.100 billion are paid each year as subsidy in power sector while Rs. 200 billion is paid by consumer as different surcharges.[40] Nevertheless, several financial experts still criticised decision of whopping high solar tariff despite decrease in Solar production costs. For example, Dr. Farrukh Saleem, criticised current Rs. 18 tariff of QASP and compared it with Rewa Ultra Mega Solar in Madhya Pradesh (India), where the tariff in equivalent of Pakistani Rs. 5.19 only.[41] The high production costs of the project, ongoing tariff conflicts between both sides and long term maintenance costs impeded extension aims and future investments.[42]

Although, it was planned to install 1000 MW, the project was later curtailed. Initial, 100 MW production was commissioned in May 2015,[43] and was completed by TBEA Xinjiang SunOasis Co. Ltd. It was decided in June 2017 to privatise Solar-Park,[44] attributing to 18 MW production on installed 100 MW and its high maintenance cost. The major controversy broke in December, 2017, when a company named Jahangir Siddiqui & Co Ltd (JSCL),owned by Ali Jehangir Siddiqui, the business partner and close friend of Sharif family, was pre-qualified to attain 100% equity stake in Quaid-e-Azam Solar Power (Private) Limited.[45] It was also feared that entire tax exception awarded to privatization of the project is done to facilitate Ali Jehangir Siddiqui.[46] Despite, criticism on awarding business partners for ownership of the project, Jahangir Siddiqui & Co. was invited in March, 2018 , to submit bid along with other eight companies.[47]

Although the bidding process was due to be completed in April , 2018, however, the process got delayed,[48] because of Quaid-e-Azam solar park corruption probe by National Accountability Bureau (NAB) and notice of Chief Justice of Pakistan Mian Saqib Nisar,[49] after heavy misappropriation were found in Auditor General of Pakistan (AGP)'s report.[50]

Quaid-e-Azam solar park produced too little and expensive as per unit cost in the current energy mix. Besides having high upfront capital cost (CAPEX) like other solar projects, it was unable to achieve balance recurring operating cost (OPEX). With total of upfront $131.15mn ($1.31mn/MWp) CAPEX it produced only 18MW for installed 100MW capacity.[30] The low production was attributed to dusty environment of Cholistan desert[26][25] and unsuitable weather conditions. Chief minister Punjab C.M., Shahbaz Shareef admitted that 18.5 MW at the cost of 13.5 billion is an expensive affair. The wind production would have been lot better option, if the project was meant to be installed in short time.[32] For each installed megawatt of solar plant produce 17.5% as compared to wind 35% , therefore, it would take 2MW for $2.66m to get the same for 1MW of wind for $2.1m. The uplift tariff of NEPRA is also 32% more expensive i.e. 14% per cent for solar and 10.6% for wind.[51] C.M. also admitted that hydro is best option in terms of per unit cost, with much higher yield. Hydro power with 13.5 billion would produce 90 MW instead of 18.5 MW with far less tariff.

A financial expert Dr. Farrukh Saleem pointed out that Pakistan is having the most expensive per unit cost and tariff for solar energy. The cost of production for solar energy has declined sharply in last 5 years, however, the contractors are rewarded with high costs. As an example, cost of Rs. 19.83 /KWh [52] QASP is much higher than Rs. 5.19/Kwh Rewa Ultra Mega Solar in Madhya Pradesh (India).[41][53] This is given the fact that interest rates are much lower in Pakistan, furthermore, equity and profit are given to the company operating the project for both foreign and local and can be fully repatriated.[54] According to Ministry of Water and Power the resulting outcome in terms of high priced tariff and subsidy given despite high tariff is afforded by consumer as high surcharges.[40]

March, 2018 Auditor General of Pakistan revealed a shocking report of serious irregularities found in award of contracts, procurements and construction (EPC) and operation and maintenance (O & M ) contracts:[50]

• The contractor with the lowest bid, M/S Chint, was not awarded the contract and instead contract which was given to TBEA without any possible reason causing national exchequer loss of $19.345 million.
• Violations of procurements were found in 2017 against Public Procurement Regulatory Authority (PEPRA) rules. It was revealed that subcontracts were awarded to companies with dubious profiles in non transparent ways.
• Mr. Rashid Majeed was a member of technical and financial bid committee and favoured TBEA. Later, he himself managed to obtained EPC and O & M contracts trigging conflict of interest. He also appointed himself as consultant Emeritus) getting Rs. 82.737 million, despite he was a member of Bank of Punjab , the lender of Quaid-e-Azam solar park.
• Serious misuse of provision of vehicles, bonuses, allowances in services and site reallocations etc. was found in several heads of company. Even the appointments of CEO, consultants, and excess payments and perks availed during the non transparent processes.
• Excessive payments in Markups were paid, the letter of credit was opened in favour of the parent company, retention of equity funds in BOP and violation of several other procedures and regulations were observation during the course of investigations.

Quaid-e-Azam solar park is located in UNESCO declared biosphere reserve, Lal Suhanra National Park. The project effected critical biodiversity site having wildlife like Chinkara (Indian Gazelle), Caracal Cat and Houbara Bustard, due to increased human activity in arid regions and construction of new network for commercial activities. Due to desert terrain, it needed a liter of water to clean each 400,000 panels, requiring 124 million liters of water annually, enough to feed 9,000 people. The cleaning cycle is repeated after every 15 days; imposing major threats of water reservoirs.[26][25] Another concern is about fate of millions of PV panels, since they have life of 25 years , hence leaving dump of silicon. The environmentalists and experts reflected their surprise that why Balochistan having lot of barren land, high solar profile and low dust count was not selected as a potential site.[31]

During construction of the project trees worth 100 thousand of rupees were disposed on cheap rates in the pitch of dark to open market without any auctioning. Forest department officials told that Vachellia nilotica kikar trees worth 100 thousand of rupees are sold illegally to acquire the site.[55]

Chief justice of Pakistan, Mian Saqib Nisar took notice of the on-going corruption inquires for the Quaid-e-Azam solar project, and demanded reports of its monthly production and expenditure information.[56][49] The case was followed again in May 2018, where the CJP took strict notice on zero power generation in Quaid-e-Azam solar and Bikki plant.[57] However, the case remained pending after retirement of Saqib Nisar and no tangible results are produced. In June 2018 National Accountability Bureau along with other power projects started an inquiry against Quaid-i-Azam Solar power project due to irregularities and alleged corruption in the contracts.,[58] it was also recommended to place its CEO Najam Shah on the executive control list (ECL).[59] In June 2018 Ex-CEO Ahad Cheema was summoned in the court on 56 company case, to present his verdict on Quaid-i-Azam Solar power project, however, he was unable to give satisfactory answer.[60]