Suki Kinari hydel project: Delay in power evacuation to attract LDs, govt warned

ISLAMABAD: The Ministry of Planning, Development and Special Initiatives (MoPD&SI) has warned the government that any delay in evacuation of power from $2 billion 884-MW Suki Kinari hydel project being established under CPEC will attract Liquidity Damages (LDs), well informed sources told Business Recorder.

Secretary Planning, Development and Special Initiatives Awais Manzur Sumra sent this unambiguous message to Secretary Power Division.

Power Division has been informed that 884-MW Suki Kinari Hydropower project is one of the biggest investment power projects under CPEC at a cost of $ 2 billion invested by, M/s China Energy Intl Group and M/s China Gezhouba Engineering Croup Company. The Company has successfully completed 92% of construction work. The power plant is expected to be ready by or ahead of Required Commercial Operation Date (RCOD) November 24, 2024 provided in the Power Purchase Agreement (PPA).

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According to Secretary Planning, Development and Special Initiatives, it appears that the Company has some concerns regarding the timely completion and availability of power evacuation line for testing and commercial operations of electricity supply. As per the Power Purchase Agreement the line must be ready 240 days ahead of Scheduled RCOS of the plant which means that the line must be ready by or before April 4, 2024.

He further stated that in case of any delay, it will lead towards payment of Liquidity Damages (LDs) as per the signed PPA. Moreover, any deviation from concessions Commercial Operation Date (SCOD) guaranteed by the GoP under PPA, power generation policies and Implementation Agreements (IAs) may lead to cyclic disputes among all stakeholders.

Secretary Planning has requested Power Division to issue appropriate instructions to relevant quarters for ensuring the timeline as per the signed PPA.

The sources said, Central Power Purchasing Agency- Guaranteed (CPPA-G) has also written a fifth letter to National Transmission and Despatch Company (NTDC) requesting the latter to expedite the work on the power purchaser interconnection facilities to meet the deadline as prescribed in the Power Purchase Agreement, i.e., 240 days prior to the Scheduled Commercial Operation Date which is April 4,2024.

In January 2017, the project had achieved financial close of hydro IPP under the framework of China-Pakistan Economic Corridor (CPEC).

The documents had been signed by PPIB Managing Director Shah Jahan Mirza and Chief Executive of Suki Kinari Hydropower Project Haseeb Khan.

This is the first hydro power project in Khyber Pakhtunkhwa province being developed by the private sector and so far the largest hydro Independent Power Producer (IPP) in Pakistan.

Suki Kinari project is located on the River Kunhar, a tributary of River Jhelum, in district Mansehra, in the eastern part of Khyber Pakhtunkhwa between Naran and Paras towns.

M/s Al-Jomaih Holding Company, (LLC) (Saudi Arabia), China Gezhouba Group Company (China) and Haseeb Khan (Pvt) Ltd (Pakistan) are sponsors of the project.

Copyright Business Recorder, 2024