Nishat’s request rejected

Nepra rejects a tariff readjustment request by Nishat Power to pass on part of the additional costs to the consumers

KARACHI: The National Electric Power Regulatory Authority (Nepra) has rejected a tariff readjustment request by Nishat Power to pass on part of the additional costs to the consumers, according to a report published by BMA Capital.

“The cost over-runs due to the delay on account of Interest During Construction, amounting to $12.8 million, were disallowed; however it is expected to be recovered from Liquidated Damages paid by the Engineering, Procurement and Construction (EPC) Contractor ‘WARTSILA,’” explained BMA analyst Nurali Barkatali.

The charges have been accumulated because Nishat Power did not complete construction by the agreed deadline of December 31, 2009, according to the report.

The plant came online on June 9th, 2010, with a delay of five months and nine days, and $39 million, or 19 per cent, over its estimated cost.

“The EPC contractor has accepted the responsibility and started paying damages from January 1, 2010, estimated to be around € 92,472/day,” added Barkatali.

Published in The Express Tribune, September 18^th, 2010.