The Private Power and Infrastructure Board (PPIB) has given more time to Western Electric Limited (WEL) to finalise tariff negotiations with Karachi Electric Supply Corporation (KESC), sources told Business Recorder. An official document suggested that the PPIB had approved the project and issued Letter of Interest (LoI) for a 150 MW dual-fuel power plant in Karachi on February 16, 2005, to carry out the feasibility study.
As per policy, the sponsors had to finalise tariff with the power purchaser within three months after completion of the feasibility study. Accordingly, the WEL was advised by the PPIB to finalise the tariff with the KESC within three months starting from February 17, 2005, which was to lapse on May 16.
Sources said that the WEL informed the PPIB on April, 21 that it had approached KESC several times to start negotiation on the tariff, but the KESC administration did not respond due to the ensuing changes in management in the context of its privatisation.
The PPIB contacted the Privatisation Commission (PC) in this regard. However, instead of PC, the KESC communicated PC views that the new management of the Corporation would negotiate tariff. But the KESC privatisation deal with Saudi company Kanooz Al-Watan has been cancelled.
The PPIB is of the view that the Minister for Water and Power may direct the utility to start negotiations with the sponsors as early as possible.
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