The Private Power Infrastructure Board (PPIB) has accused the government of giving priority to Alternative Energy Development Board (AEDB) in allocation of financial resources, which is hindering even the feasibility studies being carried out for new power projects, it is learnt.
"The GoP has provided sufficient finances to an institution similar to PPIB which is handling renewable energy projects, but resources were denied to this organisation," sources said quoting the organisation's report on October 27 highlighting impediments in the implementation of the power projects under policy 2002.
"The PPIB is currently processing 36 projects of cumulative generating capacity of about 9895 MW, with an estimated cost of $10 billion, but certain impediments are hindering implementation of these projects," sources added quoting PPIB report.
The impediments are regulatory issues, delayed tariff negotiations with power purchaser, non-availability of gas on long-term basis from SNGPL/ SSGC, inadequate quality-professional in PPIB and lack of financial resources.
Regarding regulatory issues, PPIB said that Letters of Interest (LoI) were issued to 123 MW Star Power Project (SPP) at Jarwar and 200 MW Orient Power Project at Balloki on February 13 and 16 last year, with the validity of one year each. After completing feasibility study and tariff negotiations with Wapda, these companies asked Nepra for approval of tariff in the first week of February.
The regulator finalised tariff determinations in June last but the companies were not satisfied with the decision and submitted review petitions. On that basis, Nepra re-determined the tariff of both companies in July and partially amended the tariff on August 30 last, on the request of Ministry of Water and Power. However, the sponsors still have certain reservations and they may demand other concessions, which they believe were in the ambit of power policy 2002.
"All sponsors and prospective lenders are closely monitoring progress of the power regulator and non-satisfactory tariff determinations may lead to failure of power generation policy and even close the doors of investment in power generation," sources further quoted PPIB as saying.
Non-availability of gas on long term basis, from SNGPL and SSGC, was also considered among impediments as Petroleum Ministry had assured availability of 94 MMCFD gas which would be sufficient only for 450 MW generation, whereas the country's cumulative power shortage in 2010-11 is expected to be above 5500 MW, according to PPIB.
"PPIB fears that non-availability of gas will lead to failure of future power projects, ultimately resulting in power crisis in the country. The organisation can not process at least 25 unsolicited raw site proposals of 3964 MW cumulative capacity," sources added.
PPIB was also of the view that due to non-competitive salary structure, professionals were leaving the organisation and 11 professionals have already left in 2004-05 out of total 30 professionals (36 percent).Two more professionals have also left after the recent increase in salary structure and some others have indicated to leave. Likewise, some of the candidates short-listed in recent interviews refused to join even on new salary structure.
Furthermore, quantum of work in PPIB has increased manifold owing to overwhelmingly good response to Power Policy 2002. However, the number of professionals has reduced. As a result, the existing staff is tremendously overloaded with work. The existing salary package is not attractive for good professionals.
The organisation claims that it is presently processing projects of 9895 MW with an estimated cost of approximately $10 billion, but lacks financial resources to process these projects.
"We can not carry out feasibility studies for various projects because of non-availability of financial resources," PPIB added.
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