The Private Power Infrastructure Board (PPIB) has refused to be part of the 'controversial agreement' being negotiated between the government of Qatar and the Ministry of Water and Power for setting up a 500 mw combined cycle power plant at Chicho ki Malian, sources told Business Recorder.
"PPIB has not participated in any discussion held for awarding the project to the Qatari government," sources quoted PPIB Managing Director Khalid Rehman as saying in a letter on March 31, written to Joint Secretary, Water, Zahir Shah Mohmand, a copy of which was made available to this scribe.
Any material deviation from the ECC-approved and market-tested security documents, particularly in the areas of governing laws, dispute resolution, risk or reward framework would adversely affect the independent power producer (IPPs) program, said Rehman, a former employee of Asian Development Bank (ADB).
The PPIB chief was of the view that agreements with Qatar government should be in line with those already negotiated with other IPPs, sources said.
They said that the Finance Ministry had earlier turned down a proposal of Wapda to set up 450-500 mw thermal power plant at Chicho ki Malian (Sheikhupura) and 100 mw at Khuzdar (Balochistan) in the public sector.
In the first place, the government had decided, in principle, to establish three thermal power stations of 200 mw each in Sheikhupura, Faisalabad and Khuzdar, but the Prime Minister did not clear the proposal.
The basic issue was said to be financial commitment for those two projects as the Finance Ministry had refused to facilitate the utility, sources added.
Finance Ministry's view was that it had no objection to the establishment of thermal power stations, but as for as financing was concerned, Wapda had to make provision from its own resources.
The PPIB has, however, conveyed to the concerned quarters that if the government, or Wapda, or both, were unable to arrange funds, it was ready to offer these projects for international competitive bidding (ICB).
In September last year, the Prime Minister had directed the Ministry of Water and Power and Wapda to ensure availability of energy to maintain the projected growth momentum.
"Concerted efforts be made to increase power generation capacity from hydel, thermal, alternative energy sources and nuclear means as well as required mix of all these be ensured to meet peak and lows in demand, both seasonal and locational," sources quoted the Prime Minister as directing the concerned departments.
They said that a committee on power demand-supply position, headed by Water and Power Secretary Ashfaq Mahmood had recommended that public sector generating companies (Gencos) should make investment for two 450 mw combine cycle power plants which would reduce the time spent on arranging funds and tariff negotiations. But, at the same time, it was also observed that it would be a departure from the existing approach of inducting private power units.
However, the Wapda Chairman observed that the schedule proposed by the committee was tight, and proposed commissioning dates of the units on open cycle were in September 2007 and combined cycle by March 2008.
Later, Prime Minister Shaukat Aziz decided that no thermal power plant would be set up in the public sector. But when it was felt that the situation was worsening, the earlier decision was nullified, sources added.
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