National Electric Power Regulatory Authority (Nepra) is reportedly being pressurized to increase the cost of the most expensive 425MW Nandipur Power plant by Rs 23 billion through an increase in tariff by Rs 4 per unit, well informed sources told Business Recorder. The regulator, which is dominated by political appointees at the highest level, invariably faces pressure.
According to the available information, Ministry of Water and Power's Genco-V has pleaded in its review petition that the Authority should approve an additional cost of the project and allow increase in tariff by Rs 4 per unit. The regulator had turned down the review petition of Genco-V regarding an increase in the project cost on January 29, 2016 and allowed a cost of Rs 42 billion against the demand of Rs 65 billion which implies that Rs 23 billion was not passed on to the consumers.
The Ministry argues that the cost stood at Rs 58 billion and in a review petition filed with Nepra for approval, the government put the cost even higher at Rs 65 billion including the cost of laying liquefied natural gas transmission lines. It sought approval for an increase of Rs 4 per unit in the power generation tariff to Rs 15.63 per unit.
In April 2015, the regulator had approved a cost of Rs 42 billion for the Nandipur power plant and set the power tariff at Rs 11.63 per unit. Earlier Nepra had approved the cost of engineering, procurement and construction at $109 million instead of $382 million and asked the government to adjust the higher cost in equity for the project.
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