The federal government has given approval to five business houses of the country to set up power plants at an estimated cost of around $1 billion, sources told Business Recorder on Monday. They said that the five business houses, which have been given 'green signal', include a Dubai-based firm which has been told to kick-off development work on the power plants on war-footing.
The licensees are now engaged in erecting their plants in Sindh and Punjab region. Sources said that the power generation capacity of each of the five independent power producers (IPPs) would be 200MW, totalling to 1000MW. These IPPs are: Fauji Al-Kubail (from Dubai), Orient Power, Nadeem Power, Saif Power and Muridke Power.
The estimated cost of each power plant would be $182-$200 million and the turbines would be run on gas. Officials have estimated that the new IPPs would operate at 60 percent capacity. However, if the demand increases, these plants would have the capacity to operate at 90 percent.
Source said that top officials of the five business houses had held a meeting with President General Pervez Musharraf in Islamabad a few days ago. The President lauded the efforts of the private sector in helping the government to overcome power shortage in the country, especially in Karachi.
Source said that the President had strongly urged the investors to start work on 24x7 basis, so that their projects could be operational within two years. Sources said that the new entrants have negotiated and fixed their production with Wapda at the rate of 4.5 cents per unit, which is about Rs 5.90 per unit.
They said that the investors would get 15 percent return on their investments and all sales will be made to Wapda, which has entered into the power supply contract for 30 years. "These five projects are from the first batch, while in the second batch four more power projects would be considered as standby projects," sources said.
However, they said, the standby power plants would use furnace oil and their generated power would be used if any mishap occurred. Sources said that the estimated cost of the standby power plants would be around $182-$215 million and their generation capacity would be 1000MW each.
About technology and machinery, sources said that the managements of all the five IPPs had contacted well known companies of United States, Sweden and Germany for importing large generators.
Sources believe that with the setting up of the five new IPPs and four in the standby position, the power crisis in the country would be managed to a great extent.
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