Turkish Power Plant facing $0.315 million losses daily: Karkey seeking amicable solution

The barge-mounted Turkish Rental Power Plant, which is lying idle for the last around four months after the Supreme Court''s (SC) decision against rental power projects, is facing loss of at least dollars 0.315 million daily. The foreign firm which was aimed at giving at least 230 megawatts to national grid is currently dealing cases initiated by National Accountability Bureau (NAB) against the company.
According to sources at Turkish Company Karkey Karadeniz Elektrik Uretim (KKEU), though number of options has been discussed in Islamabad to resolve the issue without letting the matter to go to international court, no consultation has so far been made with the foreign firm.
"Though we have come to know through media that the government is considering moving the SC to grant permission to make Rental Power Plants (RPPs) functional as Independent Power Plants (IPPs) to overcome the present electricity shortages, but nothing officially has come to the foreign company," they said, adding "All what we can say is that we are facing losses and hectic cases at NAB which has wrongly commenced an inquiry against Karkey."
According to them, plant has faced around dollars 37 million losses so far in terms of daily expenses and others. At least dollars 0.315 million losses are being made on daily basis. Though a legal notice has been issued to Government of Pakistan seeking compensation for losses that the Turkish firm faced for latter''s alleged breach of contract, Karkey still wants to resolve the issue amicably without going to the International Court of Arbitration.
The sources denied that any agreement with the government was currently under discussion. In reply to a query, they said beside the cases and other restrictions on foreign company, the barge mounted plant could also not be moved from the area in present monsoon season.
According to them, for maintenance and daily use of the plant, the management of foreign firm was running generators. Karachi Electric Supply Company which was earlier supplying power to the ship to meet its maintenance needs has also stopped the supply after the SC verdict.
In view of the present power shortages, the government was willing to move to SC and in case the court grants permission, the former would ink agreement with the three RPPs as IPPs as the said three RPPs were reportedly willing to generate electricity as IPPs. The efficiency of the RPPs including Gulf, Noudero-I and Karkey RPPs was better than that of the existing IPPs. The said plants would consume less fuel as compared to existing IPPs. However, no visible development in this regard was there till to date.
The government as per Power Purchase agreement was paying nine million dollars per month as rental charges to Karkey Power Plant that earlier was producing 30MW electricity against 230MW committed in the agreement. The Turkish company has recently sent a legal notice to the Ministry of Water and Power on May 19, seeking remuneration for losses made after the violation of the Rental Service Contract.
KKEU has also demanded the government to halt inquiries initiated by the NAB. It has also been informed that Karkey had suffered and continued to suffer substantial losses arising out of the inquiry, for which the Government of Pakistan should reimburse the firm.
NAB, previously, had sought payment of over dollars 180 million from KKEU during an inquiry initiated after the Supreme Court''s verdict calling for the dissolution of all rental power projects. The company summarily refused to deposit the amount. NAB had also obtained and issued a freezing order against Karkey''s banks accounts in Pakistan. The Port Qasim Authority had also taken action against the firm on April 5, after the Supreme Court''s verdict calling for the dissolution of all rental power projects.