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.
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