National Electric Power Regulatory Authority (Nepra) has approved a tariff of 0.0388 cents per unit for Lahore-Matiari Transmission Line Project for 25 years after intervention from the Prime Minister's House. The under-pressure regulator gave this determination on an application for unconditional acceptance OF ±660kV, 4,000MW Matiari -Lahore transmission Line Company. The reference Transmission Service Charges (TSC) is based on 98.5% availability with 1.5% annual non-penalized maintenance outages. The reference PKR/Dollar rate has been assumed at Rs 104.40.
The tariff is applicable to the PMTC declared as qualified Independent Transmission Company (ITC) by PPIB for a period of 25 years commencing from the date of the Commercial Operations Date (COD). This tariff is subject to grant of special purpose transmission licence from Nepra. In the event of rejection of the transmission licence, this tariff will become infructuous. Sinosure fee on outstanding balance of debt and interest at gross rate of 0.60% has been allowed for each applicable year as indicated. The tariff is calculated on the basis of Build Own Operate and Transfer (BOOT) basis. As per the Co-operation Agreement, the project will be transferred to NTDCL upon the expiry of the term of the TSA signed between NTDCL and PMTC.
Duties and/or taxes, not being of refundable nature, directly imposed on PMTC up to the commencement of its commercial operations for the import of its machinery and equipment for the construction of converter station and transmission line will be subject to adjustment at actual on COD, upon production of verifiable documentary evidence to the satisfaction of the Authority. Actual amount withheld from contractors as per applicable laws and regulations will be allowed as part of project cost at the time of COD on the basis of verifiable documentary evidence. Additional security cost in addition to already allowed security cost will be allowed as per actual, subject to submission of documentary evidence to the satisfaction of the Authority at the time of COD justifying the need as confirmed by relevant Authorities/Agencies.
NTDCL development cost which includes right of way compensation, land lease cost and cost of site survey, load flow studies and environmental studies will be adjusted on the basis of actual up to maximum limit of $12 million based on verifiable documentary evidence at COD. The cost specific to this project will not be admissible to be claimed by NTDCL in any other tariff petition submitted to the Authority. Insurance during construction will be adjusted as per actual, subject to maximum limit of 1% of the adjusted and approved EPC cost, on production of authentic documentary evidence at the time of COD tariff adjustment. Financial charges will be adjusted at COD on the basis of actual, up to a maximum of 3% of the total debt allowed (excluding the impact of interest during construction, Sinosure fees and financial charges), on production of authentic documentary evidence.
Sinosure fee, applicable on debt and accrued interest (IDC) during the project construction period will be adjusted at COD on the basis of actual amount subject to the maximum allowed limit and payments terms as approved by the Authority, on account of variation in PKR/$ exchange rate during the project construction period, based on documentary evidence to be provided by PMTC. If PMTC is required under applicable laws to make payment of Withholding Tax on Overseas Investment Insurance fee (Sinosure fee) on interest part of debt during the project construction period of 2 years 3 months and debt repayment period of ten years after COD, the same shall be allowed as pass through cost in tariff based on actual upon production of verifiable documentary evidence to be provided by PMTC. For Overseas Investment Insurance fee (Sinosure fee), reference component of tariff for each year expressed in Rs /KW/h as indicated in the reference tariff will be adjusted on the basis of variation in PKR/$ exchange rate variation subject to maximum rate of 0.60% per annum and terms of payment as approved by the Authority at COD. Reference Sinosure component of tariff for each year will be revised accordingly.
The cost of feasibility study will be allowed up to maximum of $5.4 million subject to timely submission of studies to NTDCL for endorsement of cost and relevance of studies. In addition, the evidence of payments made to the Institute carrying out the feasibility study will have to be also provided for verification at the time of COD. Interest during Construction (IDC) will be adjusted at COD on the basis of actual debt composition, variation in PKR/S, debt drawdown (not exceeding the amount allowed by the Authority) and applicable 6-months Libor /Kibor during the project construction period allowed by the Authority.
Principal repayment and the cost of debt will be adjusted at COD as per the actual borrowing composition and variation in LIBOR/ KIBOR at relevant dates during the project construction period. In case, the spread over the LIBOR/KIBOR is negotiated by PMTC at lower than 450/300 basis points respectively, the benefit of such reduction in rate will be adjusted in proportion of 40% to PMTC and 60% to the consumers through necessary adjustment in tariff at COD. Return on Equity (ROE) and Return on Equity During Construction (ROEDC) will be adjusted at COD on the basis of actual equity injections and PKR/$ exchange rate variation (within the overall equity allowed by the Authority at COD) during the project construction period as allowed by the Authority.
The specific items of project cost paid in foreign currency (ie $) will be adjusted at COD on account of actual variation in exchange rate over the reference PKR/$ exchange rate of Rs 104.40/ $ on production of verifiable documentary evidence to the satisfaction of the Authority. The reference tariff table will be revised at COD while taking into account adjustments. The PMTC shall submit its request along with all relevant source documents to the Authority within 90 days of COD for necessary adjustments in tariff.
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