KARACHI: To deal with the power crisis, the federal government has dispatched seven independent power producers (IPPs), which have fuel supply agreement with the Pakistan State Oil (PSO), furnace oil for one week on Saturday and asked them to start running their plants on 100 percent capacity.
Sources informed that the PSO on directives of the government has given around 60,000 tons furnace oil to seven IPPs for one week for producing power that will be added to the system for providing temporary relief to the general public.
Those given the furnace oil for one week included Japan Power (capacity 100mw), Atlas Power (capacity 214mw), Sapcol (capacity 130mw), AES Lalpir (capacity 325mw), Lalpir Pak Jen (capacity 325mw), Kel Power (capacity 127mw), and Saba Power (capacity 130mw).
“This will create another stream of circular debt for the IPPs as the government is already defaulting on their payments and consequently IPPs are under default with banks, O&M operators and other suppliers,” a representative of the IPPs said, adding this ‘forced’ power generation that would IPPs in further financial crises if NTDC could not pay this forced credit within 7 days. It may be noted here that the government has already defaulted on Rs61 billion it has to give to the 8 IPPs, where the government is already in sovereign default, which are operating under 2002 power policy and have the power generation capacity of around 1700mw. Besides, there is a circular debt of over Rs400 billion that is still hovering to haunt the government.
Out of the seven IPPs that have been asked to start generate power and run their plants on 100 percent capacities, Japan Power and Sepcol Power already receiving fuel directly from the PSO on NTDC behalf.
Industry sources termed this action of the government intimidating for the IPPs that are already under huge financial burden as the government, instead of retiring the dues of power sector, is still heaping the IPPs.
“This is done without any due consultation with the stakeholders. IPPs are purchasing furnace oil on advance payment to the PSO but this time all of sudden this arrangement is made without any due consultative process and setting of due procedures.”
What, he questioned, will happen after a week when all seven IPPs go ask the government for their payments of adding valuable megawatts in the system? It appears that the government is getting all our support in its time of need, but this goes in reverse proportion when IPPs demand for their payments, this gross, he added.“No doubt, the several IPPs were left with no other option but to call sovereign guarantee.”