Pakistan Electric Power Company (Pepco) Managing Director Tahir Basharat Cheema has said on Monday that all the 14 rental power projects (RPPs) became functional by December 31, 2009 as originally envisaged then and the applicable tariff for the RPPs would have been raised by six percent and not 31 to 45 percent.
Talking to Business Recorder, he said the selection of Asian Development Bank (ADB) as the third party auditor in response to the mounting criticism over the RPPs delayed the establishment of the RPPs resulting in the much higher tariff. Additionally, Cheema stated that the ADB had already extended support for the establishment of eight RPPs with a combined generating capacity of 1168 MW and work on these was under way.
He said Techno power RPP at Faisalabad had begun generating 150 MW, Golf RPP was expected to begin generating 62 MW by February 10. Similarly, Reshma RPP would start generating 200 MW by the end of February, he said, adding that the ADB report would be released to the relevant ministries by the end of the current week.
The Pepco Managing Director confirmed the news story that a presentation was made by the ADB on January 6, but insisted that it was a consultative meeting wherein the bank had requested some data from the government. It was not a summary of its findings, nor indeed an audit of the RPPs, he said.
He said that the contract for the RPPs envisaged 36 percent capacity utilisation as opposed to 32 to 35 percent as noted in the news report. According to reports, the government would be legally bound to make payment for 90 percent capacity utilisation. Meanwhile, the Water and Power Ministry officials said that the ADB had not submitted a report on the RPPs. When contacted, an official in the ADB neither confirmed nor denied the media reports about the findings regarding the RPPs.
Asked if it would issue a contradiction, the official said that the ADB was going to submit its report to the government by the end of this week, hence there was no need to issue any clarification or contradiction. Finance Secretary Salman Siddique, when contacted on phone, stated that the ministry had not yet received any audit report from the ADB on RPPs.
He stated that the report was expected by the end of the current week. Meanwhile, the Finance Ministry, in a statement issued on Monday, clarified that the ADB had not yet submitted third party evaluation report. "A section of the print and electronic media has carried a story with reference to the Finance Division pertaining to the third party evaluation of the energy sector being carried out by the Asian Development Bank.
"It is clarified that as yet no report of the Asian Development Bank on the subject has been furnished to the Ministry of Finance. In fact, the third party evaluation report is expected to be received in the Finance Division on Friday (January 22). Therefore, the story, appearing in a section of the print and electronic media, is speculative and not based on facts," the Ministry claimed.