Karkey Rental Power Plant: Govt purchases electricity at shocking price of Rs41 per unit

 NEPRA approves 61 paisa increase in power tariff for May. DESIGN: ESSA MALIK

ISLAMABAD: 

In an astounding development, the Central Power Purchasing Agency (CPPA) has disclosed that the government was purchasing electricity from Karkey Rental Power Plant at record price of Rs 41 per unit, more than twice the amount paid to any other Independent Power Producer.


The National Electric Power Regulatory Authority (Nepra) expressed serious concern on Thursday over the shocking rates being given to Karkey Power Plant – the world’s largest power ship – for electricity.


CPPA authorities during hearing of a petition also disclosed that the government was paying $9 million per month as rental charges to the Karkey Power Plant that was producing 30MW electricity against 230MW committed in the agreement.


Nepra officials said that government departments were involved in this negligence and such a huge burden could not be passed on to consumers.


The government is giving Rs26.37 per unit on account of capacity charges and Rs15.48 per unit on account of fuel cost to Karkey Rental Power Plant, official said during the public hearing.


CPPA officials also mentioned said that letter of credit had not been opened yet to get fuel as banks were reluctant to provide funds to the power sector.


Nepra reserves judgement over power tariff hike


Eight power distribution companies filed a petition seeking an increase in power tariff by 68 paisa per unit for May on account of fuel adjustment charges.


However, Nepra following the hearing approved increase of 61 paisa per unit for the eight Discos including the Karachi Electric Supply Company against the demand of 68 paisa.


Bleeding losses


Auditor General of Pakistan in its report for the current financial year observed that a rental contract was signed between Lakhra Power Generation Company and Karkey for 231.8 MW rental power plant at Korangi Thermal Power Station, Karachi.


The Auditor General noted that the seller did not start production before the commercial operation date of April 7, 2010 and resultantly power guarantee of $1.25 million was to be encashed along with liquidity damages of $2.39 million was to be recovered up to June 30, 2010. Due to non-adherence to contract clause the company sustained a total loss of $3.64 million.


Published in The Express Tribune, July 1st, 2011.

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