ISLAMABAD: Genco Holding Private Limited (GHCL), an administrative entity of public sector power generation companies (Gencos), has sought a blanket approval of purchase of equipment for 747-MW Combined Cycle Power Plant (CCPP) Guddu to run the plant during the summer.
GHCL has also proposed that dispute with M/s GE should be dealt separately as the latter has threatened to declare CCPP as a default plant if its overdue payment is not cleared.
GHCL, in a letter has informed Power Division that it wrote three letters about release of payments to M/s General Electric under Contractual Service Agreement (CSA) for 747-MW, CCPP, as per provisions of the CSA between M/s. General Electric (GE) and Central Power Generation Company Ltd (CPGCL) Guddu of September 30, 2017.
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The major inspection of GT-15 was scheduled to be carried out on completion of 32000 FFH (Factored Fired Hours) in October 2022.
However, M/s. GE managed to extend the operational span of this Gas Turbine by another 3,000 hrs after consulting with their engineering department following a baroscopic inspection. These extended hours have also been exhausted on March 23, 2023 and M/s. GE is now looking for extension of another 1000 FFH.
Genco Holding Company Limited is of the view that since it will not be possible to extend FFH any further; therefore, it will be prudent to prepare for the major inspection and overhaul in May 2023. Hence, further operations of GT-15 without carrying out the manufacturer’s recommended major inspection may put the machine at risk and it will have to be shutdown.
According to GHCL, the designed efficiency of the 747-MW, CCPP, Guddu, as well as, availability of indigenous gas for the power plant makes it a priority power plant while issuing dispatch instructions by the System Operator, i.e., NPCC. Hence, its operations are demanded on priority, especially during the summer season, which is approaching fast. In addition, in the light of recommendation of the inquiry committee after recent blackout, this power plant has to share significant dispatch for system stability.
However, due to the instructions issued by the Ministry of Energy (Power Division), in its letter of March 31, 2022 to approach M/s. GE to compensate CPGCL for the losses incurred to the tune of Rs.10.8 billion, in addition to the cost of restoration of GT-14 and considering M/s. GE for blacklisting CPGCL (GENCO-I) is not able to release contractual payments under CSA to M/s. GE since May 2022. Presently, an amount of $ 8.546 million is outstanding for M/s. GE.
Managing Director/ CEO, GHCL, Shahid Mahmood, in a letter to Power Division has apprised that during several meetings, M/s. GE has highlighted that due to long overdue payments under various heads of the CSA, their top management (abroad) may issue a notice of default and suspend the services for 747-MW, CCPP, Guddu.
“In such a situation the OEM’s recommended maintenance schedule for the said power plant will be compromised,” he added.
According to MD/ CEO GHCL, in order to carry out the major inspection of GT-15, which is already overdue, the immediate purchase of spare parts and consumables is absolutely essential.
The CPGCL (GENCO-II) of March 27, 2023 sought guidance regarding issuance of purchase order and making payments under the CSA. In response, the Power Division, in its letter of March 29, 2023 directed to take decision at its own management/ BOD level.
The Chief Executive Officer, CPGCL on April 2, 2023 conveyed the decision of the CPGCL’s BoD that it has principally decided to place purchase order to M/s. GE for mandatory spare parts (capital & consumables) to be utilized for major inspection of GT-15 to ensure availability; otherwise, the Company is exposed to serious financial and technical risks and due to non-availability of parts, M/s. GE may also be absolved from its performance obligations under the CSA. CPGCL has also sought concurrence of Power Division upon this decision in the presence of instructions and recommendations of Senate Standing Committee on Power (SSCoP).
MD/ CEO GHCL argues that it is prudent that the disputed matter of GT-14 as elaborated may be dealt separately, requesting that the Power Division may issue blanket approval to CPGCL (GENCO-II) for placing purchase order to procure required spare parts and release the contractual payments to M/s. GE as and when they become due, irrespective of the issue of claiming Rs 10.8 billion from GE which will remain disputed and will have to be settled separately. This is necessary to ensure that GT-l5 may be ready to operate on full load during the coming summer.
Copyright Business Recorder, 2023