Govt working towards a resolution in RPPs case

Says it is looking for some middle ground to get RPPs functioning again.

ISLAMABAD:

The government is working to find a middle way in the dispute with rental power plants (RPPs) and work out some way to bring them back online, a parliamentary committee was told on Thursday.

While briefing the parliamentary panel, Water and Power Secretary Imtiaz Qazi said the government had added 3,394 megawatts (MW) to the national grid since March 2008, with 400MW contributed by rental power plants.

He said that the capacity to generate 400MW of additional power was still available with rental power plants, but the plants were presently idle due to the cancellation of their contracts following a Supreme Court decision. “We are trying to find a middle way to bring rental power plants back,” Qazi reiterated.

The Senate Standing Committee on Water and Power had met to review the power situation of the country here in Parliament House, with Senator Zahid Khan in the chair.

After excluding the 400MW power capacity of RPPs, the remaining generation capacity out of the total of 3,394MW is still available; however, less power was being generated due to a dearth of fuel, especially gas, the panel was told. The committee was informed that some power plants had to be shut down due to the non-availability of gas.

“Five plants were shut down due to the unavailability of gas,” Qazi said; adding that the cabinet has been requested to take measures for the provision of 290 million cubic feet of gas per day (mmcfd) to run these plants. The panel was informed that the insufficient supply of gas had been caused by diversion of existing resources to the CNG and fertiliser sectors, causing problems for power generation companies.

“The power sector used to receive 750mmcfd of gas in 2000, which has reduced to 300mmcfd due to the diversion of gas to other sectors,” power ministry officials said.

Imtiaz Qazi said that circular debt was the major issue behind problems in the entire power generation and distribution system. He added that the demand for power was increasing at 7.31% per annum, while the number of consumers was growing at 5.38% per year. “But no new power is being added to the extent that it could meet requirements,” he noted.

He said that current power generation cost was Rs11.89 per unit, but it is being sold at Rs8.88 per unit – with Rs3.01 per unit being paid by the government under price differential claims. “Due to price differential claims, the government is bearing Rs20 billion in power subsidy every month,” Qazi said. He further noted that an amount of Rs69 billion is yet to be recovered from consumer on account of fuel adjustment surcharges. “This amount is not being recovered due to stay orders from courts in about 750,000 cases,” he claimed. “We are going to appeal to the Supreme Court to club all these cases to settle them,” Qazi informed. He added that the Prime Minister has also directed the Law Minister to help out the power ministry in this regard.

Qazi further claimed that an amount of Rs58 billion has not been billed to consumers on account of a 4% equalisation surcharge due to yet more stay orders.

The panel was also told that the generation cost of a gas-based plant came to Rs7 per unit; Rs13.45 per unit for an oil-based plant; diesel-based plant at Rs19.40 per unit; wind plants at Rs13.75 per unit; while power generated from a nuclear plant costs Rs 6.89 per unit.

The power tariffs for solar based plants have not yet been determined, but the panel was told that the projected cost is about Rs19 per unit.

Published in The Express Tribune, June 15^th, 2012.