Rs780m being paid for 51MW rental power | DAWN.

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12/6/12 1:40 AM

Rs780m being paid for 51MW rental power

Considering local market, they called it a highly expensive deal where the government will only turn out to be a loser. - File photo

ISLAMABAD: The government on Monday accepted on the floor of the house that it was paying a staggering sum of Rs780 million to the ship-mounted rental power plant anchored in Karachi on monthly basis that was only producing 51 megawatts against its total capacity of 232 megawatts. In a written response to a question asked by Mohammad Pervaiz Malik of PML-N, Federal minister for Water and Power Syed Naveed Qamar informed the National Assemble that Rs780 million were being paid to Karkey Ship Mounted Rental Power Plant on account of Rental Service Fee (RSF).
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Rs780m being paid for 51MW rental power | DAWN.COM

12/6/12 1:40 AM

Explaining the reason behind lack of full utilisation of the rental power plant, the minister said, as per the agreement with SELLER, the company that owned the power plant, the value of Fuel Payment Letter of Credit (FPLC) was required to be opened with effect from April 20 this year. The total value of FPLC has been worked out as Rs5 billion, said the minister. The minister further said it was contractual obligation of Lakhra Power Generation Company Limited (LPGCL) to open and maintain FPLC in favour of SELLER for smooth operation of the plant. However, the minister accepted, despite hectic efforts made by the ministry of water and power, and LPGCL, no bank has still offered any terms for the establishment of FPLC in views of excessive exposure of banks with the power sector. Its probably first time, the government on record has accepted underperformance of this project that was brought in the system with much fanfare. At the time of its inauguration Raja Pervaiz Ashraf, the then minister for water and power, termed it a major achievement to bring in new technology to meet ever rising electricity needs. But banks refusal to provide FPLC is failing the project which definitely reflects poorly on the government of the day. However, answering third part of the question in which Mr Malik had sought clarifications about reported allegations of kickback involved in the deal, the minister said Karkey rental power
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Rs780m being paid for 51MW rental power | DAWN.COM

12/6/12 1:40 AM

plant had been awarded contract through international bidding, therefore all terms and conditions were being followed. The minister also refuted corruption charges. Despite giving a detailed answer about the nature of agreement and problems project is facing at the moment, the minister didnt mention any possible date by what time the government will be able to make it fully functional. Even before the inauguration of this rental power plant in November 2010, its deal attracted lots of criticism from the independent observers of the power sector due to its unfeasibility in the local market. The deal was concluded when former minister of water and power Raja Pervez Ashraf was ruling the roost. Considering local market, they called it a highly expensive deal where the government will only turn out to be a loser. Now, it has almost been one year when the power plant was made operation, but to no avail.
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