Two key thermal plants: PD ‘reluctant’ to share sell-off timelines

ISLAMABAD: The Power Division is reportedly reluctant to share timelines of privatisation of two key thermal power plants, Nandipur Power Plant and Guddu Power Plant (NPP & GPP), well-informed sources told Business Recorder.

Ministry of Privatisation, in an Office Memorandum (OM) titled “entities in pipeline for privatisation - Nandipur Power Plant and Guddu Power Plant,” has shared its letter of May 17, 2024 and subsequent reminders of June 28, 2024 and July 5, 2024, saying that requisite information in the matter is still awaited which needs to be expedited on a priority basis.

Nandipur and Guddu Power plants: PC has reservations against PD for not sharing info with FAs

Privatisation Ministry, sources said, maintains that Nandipur and Guddu Power Plants are on Active Privatisation List (APL) since a long but with no substantial progress. Due diligence conducted by Financial Advisor indicated the following key issues associated with these power plants that resolve resolution for taking the privatisation process further: (i) removal of charge, created on assets of the power plants, for Sukuk Bond issued by GoP;(ii) separate corporate entities to be established each for GPP & NPP, carving out from CPGCL (GENCO-II) and NPGCL (GENCO-II) respectively; (iii) separate Power Purchase Agreements (PPAs) to be entered into, for GPP and NPP, with CPPA-G; (iv) Implementation Agreement (IA) or GoP guarantee, similar to GoP’S with IPPs, for both GPP and NPP; (v) separate gas allocation, specific for these power plants; (vi) separate GSPA (post gas allocation);(vii) creation of separate Gas headers; and (viii) transfer of land and assets in the name of new NPP and GPP Companies.

The Cabinet Committee on Privatisation (CCoP) on a summary submitted by Ministry Privatisation on February 07, 2024 directed the Power Division to submit timelines for each of the issues hindering the privatisation process within three days to Privatisation Division. However, no such timelines have been shared with Privatisation Division till date. A summary regarding five-year privatisation programme 2024-29 was placed before the CCoP in its meeting. NPP & CPP were recommended for inclusion in the programme with the conditions that Power Division carves out efficient plants (combined cycle) for privatisation and that CCoP’s earlier decisions are complied with.

According to sources, Ministry of Privatisation also urged Power Division to share the following information on top priority: (i) Power Division may clarify and apprise about final phasing of 9 DISCOs (especially 3 DISCOs proposed for concession) so that a decision of CCoP may be obtained in line with the recommendations of Power Division; and (ii) Prior actions may kindly be completed at the earliest under intimation to this Ministry so that the implementation of the privatisation programme with regards to DISCOs could be initiated and completed within the specified phase of privatisation.

Privatisation Division further contended that prior conditions, for DISCOs, need to be completed at the earliest by Power Division enabling Privatisation Commission to initiate the process of privatisation since the process of hiring of FAs for DISCOs will only be initiated once Power Division, being the administrative Division, resolves the associated issues and intimate readiness of DISCOs for privatisation.

Copyright Business Recorder, 2024