Senators say consumers won''t repent for government''s Nandipur sin

A parliamentary panel headed by Senator Nauman Wazir said on Friday that it would not allow the government to pass on additional cost of Rs 36 billion of 425 MW Nandipur power project on to consumers through tariff. During the meeting, Asif Sheikh, Additional Director Nandipur power project, informed the panel that the cost of the project had increased from Rs 22 billion to Rs 58 billion, ie, a Rs 36 billion increase because of 15-month delay in issuance of legal opinion.
Senator Nauman Wazir questioned whether the government intends to pass on burden of Rs 36 billion onto consumers but at the same time he made it clear that the panel would not allow the government to overburden consumers. Nepa has allowed a 15 percent Internal Rate of Return (IRR) to the government on investment.
Senator Wazir maintained that the government should pick up Rs 36 billion as equity, adding that by doing so the government''s earning would come down from 15 percent to 8 percent as the government is responsible for the delay not the masses. He further directed officials of Water and Power to submit a detailed viewpoint on this proposal in the next meeting expected to be held on February 11, 2017.
Senator Nisar Mohmand stated that there was corruption and negligence in the project, adding that whichever party is responsible the panel would summon them as part of the inquiry. He further stated that the machinery with a guarantee of two years remained at the port for 15 months but surprisingly the period of guarantee for same machinery had been increased from 2 years to 3 years.
Senator Nauman Wazir who is the Convenor of the panel made it clear that the person who is responsible for delay in issuance of legal opinion would be taken to task. Joint Secretary Ministry of Water and Power (Power& Finance), Zargham Eshaq Khan claimed that it was the Ministry of Law and Justice which delayed the project in 2011.
Additional Director Nandipur stated that the plant is fully functional from January 18, 2017 and running at full capacity of 425MW. The plant had been shut from September 5, 2016 for inspection by the contractor.
The panel expressed serious annoyance at the CEO of the plant for not attending the meeting which, according to the panel, was very important.
The panel also directed the officials of Water and Power to submit details of economic merit order of Gencos and IPPs.
Senator Nauman Wazir enquired about the reasons for the wide difference in efficiency in public sector power thermal power plants and IPPs and added that the efficiency of Nishat Power Limited was 45 percent, Nishat Chunian 45 percent, Foundation Power 48 percent, Liberty Power 45 percent, Orient 51 percent and Saif Power 51 percent.
He further stated that IPPs are doing well as compared to Gencos, and questioned: "What was wrong with the public sector power plants?"
Nauman Wazir further stated that sufficient generation capacity was available in the country and if the plants are run at full capacity load shedding could be eliminated immediately.
The panel also sought a comparison that would reveal what would be the cost of refurbishment of de-rated plants in ten years vis- a -vis new machinery as the efficiency of old plants is very low.
Joint Secretary Water and Power (NTDC) , Zafar Abbas acknowledged that efficiency level of Gencos is not at par with IPPs as the private sector was more vigilant in maintenance as compared to public sector. The performance of Guddu power plan, Jamshoro power plant and Kotri power plant also came under discussion and justification for allocating gas to less efficient plants. He further stated that most of the defects in Gencos have been rectified.
The panel argued that Gencos should have to follow the maintenance schedule in accordance with the procedure given by the OEMs.
The representative of National Power Control Centre, Muhammad Ilyas revealed that his organisation was running the plants in accordance with the economic merit order of each plant.
Replying to a question, Joint Secretary Zargham Eshaq Khan said that KE has not passed Rs 62 billion financial benefit to the consumers. Director General Nepra, Chaudhry Masood said the regulator would consider this aspect in the new multi-year tariff for KE which is expected to be announced within a week.