ISLAMABAD: Power Division has reportedly expedited consultation process on early termination/ buyout of 11 oil-fired power plants of 3319MW, well-informed sources told Business Recorder.
Power Division has constituted a nine-member cross functional committee to prepare recommendations for premature termination of the following 11 oil-fired power plants installed under various policies: (i) Hub Power - 1200MW; (ii) Kohinoor Energy - 124MW; (iii) AES Lalpir - 350MW; (iv) Pak Gen Power Limited - 349MW; (v) Saba Power - 126MW; (vi) Attock-Gen - 156MW; (vii) Atlas Power - 214 MW; (viii) Nishat Power - 195MW; (ix) Nishat Chunian - 196MW; (x) Hubco Narowal - 214MW; and (xi) Liberty Power - 196MW.
Headed by Additional Secretary -II of Power Division, the committee will comprise Managing Director PPIB, Director Legal, PPIB, General Manager, NPCC, General Manager( Power System Planning), NTDC, Chief Financial Officer, CPPA-G, Chief Legal Officer, CPPA-G, Chief Technical Officer, CPPA-G and Manager, Policy and Planning. CPPA-G is starting its consultation process within the next few days. The committee will conduct legal, technical and commercial due diligence of plants and propose future course of action after conducting a detailed analysis within the parameters of Implementation Agreement (IA) and Power Purchase Agreements. Power Division maintains that 5% average annual dispatch factor at Rs 13+ per KWh fuel cost is too expensive and Rs 60 billion a year in "take or pay" capacity charges add Rs 0.6 per unit to the consumer tariff. It further contends that the potential solution of these plants is early termination/buyout at a discounted value (estimated Rs 150-200 billion) via PIBs, Sukuks, etc., as the government will pay them Rs. 450 billion in aggregate capacity charges over the remaining average 7 years of their contracts and consequentially take out Rs 0.6 per unit from the overall consumer tariff going forward. Retirement/delicencing of all government-owned Gencos (3500MW) will be completed by September 2222 with 50% already completed. Secretary Power, Ali Raza Bhutta will be given a presentation on progress in Gencos retirement and adjustment of their employees in Distribution Companies (Discos) on Tuesday (today).
Copyright Business Recorder, 2021
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