The Pakistan Electric Power Company (Pepco) is reportedly under immense pressure from top brass of the Ministry of Water and Power to give clearance to six rental power projects (RPPs) whose Rental Service Agreements are not yet effective, sources in the Ministry told Business Recorder.
The Cabinet in its meeting on January 1, 2010 had directed the Ministry of Water and Power to revisit the contracts of six RPPS of 738 MW and remove inconsistencies, as suggested by the third-party audit; the Rental Service Agreements (RSAs) of these 6 RPPs are not yet effective.
Sources said that the Ministry of Water and Power approached the Cabinet Division for halting implementation on Cabinet's decision regarding removal of inconsistencies in contracts of RPPs, instead of approaching the Prime Minister for future line of action.
Some of the RPPs which are considered as very 'dear' to the ' strategists are Sialkot Rental Power Eminabad, Ruba Power Generation, Manga-Raiwind, Kamoki Energy Limited and Independent Power Limited(IPL) of former Director of FIA, Sharif.
Sources said that the Ministry of Water and Power in its implementation status report on ADB audit report on RPPs had stated that the signed RPPs were at various stages of implementation and it may, therefore, not be realistic to re-open the signed agreements for removal of inconsistencies without harming/declaring the projects.
This is what was mentioned in an Office Memorandum (OM) issued by a Section Officer of the Cabinet Division.
According to the OM, the implementation status, as is being dispatched by the Water and Power Division, is departure from the Cabinet decision. The Ministry of Water and Power was requested to refer the matter to the Prime Minister under Rule 15(1)(a) of the Rules of Business, 1973.
Sources said that some of the already approved RPPs of 1156 MW are also delayed due to different reasons.
The current status of these projects obtained from the PPIB is as follows: (i) Techno Rental Project, Summundri road Faisalabad (150 MW)-Genco III has successfully achieved partial COD for 60 MW on June 11, 2010 after carrying out the Reliability Run Test (RRT) on 11 June 2010 in the presence of KEMA- independent engineer and Genco-III's test witnessing team. Pepco has informed that at present Techno's plant is under shutdown due to non-availability of fuel; (ii) Walter Rental Project, Naudero Sindh, Pepco has informed that civil, electrical and mechanical installation work is in progress and WPI was required to achieve the target COD on May 15, 2010. However, WPI could not achieve it. SSGC and SNGPL have signed Gas Sale Agreement (GSA) on June 29, 2010.currently, the plant is under testing process and is expected to achieve COD shortly; (iii) Reshma Power Rental Project (201 MW), Pepco has informed that civil works of 12 Nos foundations for installation of diesel engines completed and 9 Nos diesel generating sets have placed on foundation and their alignment work is in progress while civil works for the remaining 12 Nos diesel engines are in progress. Genco-III (buyer) has informed that the consignment in respect of Reshma Power generation(seller) is lying at Karachi port for payment of demurrage charges amounting to Rs 540728 up to May 5, 2010 and these charges are increasing day by day due to seller's default. Buyer has further informed that due to seller's failure to achieve target COD of December 31, 2009 as per RSC, it has encashed the performance guarantee earlier submitted by the seller as per RSC, besides, the seller has not yet intimated any new date of COD despite repeated requests by the buyer.
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