ISLAMABAD: The federal government has decided to contest the case filed by Fatima Energy Limited against the tariff determined by the power regulator.
“Prime Minister Nawaz Sharif has directed the Ministry of Water and Power to engage a well-reputed counsel to defend position of the federation in court,” a senior official of the water and power ministry said while talking to The Express Tribune.
“Management of Fatima power plant has gone into litigation against the tariff set by the National Electric Power Regulatory Authority (Nepra). The company wants take-or-pay tariff for the project,” the official said while quoting the discussions held in a high-level meeting.
The case is pending in the Islamabad High Court that has sought comments from the federal government.
Ministry seeks up to 20% tariff cut for Thar coal projects
In the meeting, the prime minister was informed that one of the idle power plants - Fatima Energy Limited - was currently supplying 120 megawatts as an interim arrangement to the national grid.
Punjab Chief Minister Shahbaz Sharif told meeting participants that Fatima Energy was trying to change its status from a captive power plant to an independent power producer (IPP).
The premier was informed that a power purchase agreement was being negotiated with the company, which was also being persuaded by the Ministry of Water and Power to withdraw the case.
Secretary to the prime minister recalled that in a meeting of the Cabinet Committee on Energy in September 2016 the then water and power secretary, Younus Dagha, had given a comprehensive presentation on the utilisation of idle power plants.
According to Dagha, a total of 1,130MW could be added to the system from Saba Power (126MW), Southern Electric Power (117MW), Japan Power (107MW), Fatima Energy (120MW), Reshma Power Generation (96MW), Gulf Powergen (64MW) and captive power plants (around 500MW).
Nepra promises to protect Karachi power consumers
Fatima Energy, which was among these plants, is currently supplying 120MW as an interim arrangement to the national grid.
In previous meetings, Finance Minister Ishaq Dar had complained against the National Accountability Bureau (NAB) for filing cases against officials of the water and power ministry, which discouraged them from utilising the capacity of idle power plants.
NAB filed references against 96MW Reshma Power Generation Limited and 64MW Gulf Power Generation Company. Therefore, these plants were not being pursued for power generation.
NAB cleared machinery and equipment of the power plants and there was no bar on their use. However, cases were still pending against officers of the Ministry of Water and Power, making the current officers reluctant to press ahead with the plan for idle power plants.
The power ministry also submitted its proposed plan for the utilisation of idle power plants in the Economic Coordination Committee (ECC), which gave approval.
Published in The Express Tribune, April 23rd, 2017.
Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ