Power shortage: IPPs to run on 100% capacity now
In a belated move to cope with the power crisis, the government has shipped furnace oil for one week to seven independent power producers (IPPs), which have fuel supply agreements with Pakistan State Oil (PSO), and asked them to start running plants at 100% capacity.
According to sources, PSO, on the insistence of the government, has provided around 60,000 tons of furnace oil to seven IPPs to help them produce sufficient electricity to provide immediate relief and placate the agitating people.
The IPPs which received the furnace oil included Japan Power (100-megawatt capacity), Atlas Power (214MW), Sapcol (130MW), AES Lalpir (325MW), Lalpir Pak Gen (325MW), Kel Power (127MW) and Saba Power (130MW).
Before the dispatch of fresh oil consignments, these power plants were operating at 30% to 40% of their installed capacity. According to sources, the managements of the IPPs, which adjusted their shifts according to the low capacity utilisation, are wondering how they will be able to arrange manpower on an immediate basis.
“This will create another stream of circular debt for the IPPs as the government is already defaulting on payments and consequently IPPs are not able to repay bank loans. This ‘forced’ power generation will put IPPs in further financial stress if the National Transmission and Dispatch Company (NTDC) is unable to pay the credit in seven days,” said an IPP representative.
Industry sources termed the government’s move ‘intimidating’ as the government, instead of retiring the dues of power companies, is mounting pressure on them.
“What will happen after a week when all seven IPPs go and ask the government for payments for additional power generation,” the IPP representative asked.
Commenting on the developments, NTDC Director General Ejaz Rafique Quraishi said it was IPPs’ job to produce electricity and no discussion or consultation was required.
“They will have to operate now at 100% capacity, this is not our issue from where they arrange the manpower, this is their concern,” he said. “There will be zero tolerance.”
Quraishi also rejected the IPPs’ claim that payments had not been released. “The government is regularly paying the IPPs and the perception that we are not paying the dues is absolutely wrong.”
Despite repeated attempts, IPPs Advisory Council Chairman Abdullah Yousaf was not available for comments.
Published in The Express Tribune, July 1st, 2012.
COMMENTS (4)
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If supply > demand, then the prices go DOWN
even if we sum the installed capacity of all the IPPs then also country falls short of demand by several thousand megawatts. i would like to call upon those including govt officials who says that installation is apt but the sole problem is that of the lack of funds and fuel. i think even the installed capacity is less
Now every crisis shall be resolved especially those whose were resolvable up to 2018 most especially importantly electricity and gas crises and this shows and proves that these two crises were handmade,self-made and self-created.
given the government is putting so much money into increasing power and reducing the price of petrol like crazy, I think the PPP is preparing for elections. now it would be too soon to be doing all this if the elections were in march. i think they know they will need to call elections earlier than that and so are preparing for that. this is the reason they are putting the government finances into even worse territory, its because they need to save their own seats. we will see if they can sustain this (because the IMF will not be ok with them doing all these things at a time we can barely afford anything) till the elections and if it will help them at all