Pakistan strikes ‘lowest priced’ O&M deals for power plants

LAHORE: National Power Parks Management Company (NPPMCL) has struck 'lowest cost' Operations and Maintenance (O&M) deals for its two power plants with a combined generation capacity of 2,453 megawatts, a statement said on Friday.

The state-owned NPPMCL engaged China’s SEPCOIII for the O&M of its 1,230MW Haveli Bahadur Shah Combined-Cycle Power Plant through an agreement, undersigned by Rashid Mahmood, CEO NPPMCL and Shi Huaiwei, Vice President SEPCOII.

“With this deal, the NPPMCL has managed to reduce the O&M cost, allowed by the regulator for the consumers, from Rs0.52/kWh to Rs0.20/kWh. This fee structure is estimated to result in direct savings of at least Rs23 billion over the next 12 years,” the handout said.

Furthermore, an O&M deal for 1,223MW Balloki Combined-Cycle Power Plant was signed with TNB REMACO, a subsidiary of Malaysia’s leading power company Tenaga Nasional Berhad. “This agreement has a reference value of $176 million and it will bring the O&M costs for this plant down to Rs0.16/kWh, saving more than Rs18 billion in 12 years,” the release added.

It said that under these agreements, both contractors would have end-to-end responsibility for the operations and maintenance of the power plants for at least 12 years or their second Major Inspection (MI), whichever was later.

“SEPCOIII and TNB shall deploy human resource and be responsible for any repair or replacement of functional parts at the plants to maintain plant availability at 92 percent,” the statement said.

It further informed that the O&M agreement includes robust liquidated damages clause and other contractual safeguards to ensure the performance against guaranteed efficiency and availability values. It must be noted that the SEPCOIII and the TNB were selected through an open and transparent bidding process.