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November 12, 2019

MPs’ body asks govt to recover Rs39 bn from five IPPs


November 12, 2019

ISLAMABAD: A parliamentary body after examining the business affairs of the Independent Power Producers (IPPs) for six months has come up with a conclusion, asking the government to recover Rs39 billion from five power producers, as they provided untrue information of oil consumption for power generation.

The National Electric Power Regulatory Authority (Nepra) since the time of installation of IPPs did not check their heat rate. The regulator has shortage of technical manpower, the report of the sub-committee noted. They also charged high tariff and capacity charges.

The sub-committee that was constituted by the Senate Standing Committee on Power on May 15, 2019 to calculate the high tariff, capacity charges, heat rates and calculation of pay back periods of IPPs over the last several years, has submitted its report to the Senate Standing Committee on Power that met here with Senator Fida Muhammad in the chair.

Nauman Wazir Khattak, Convener of this sub-committee said that they had thoroughly reviewed the affairs of the IPPs on these grounds and also taken information from Nepra website.

The committee report said that the government has to recover Rs7.12 billion from Nishat Power Limited, Rs7.82 billion from Nishat Chunian Power Ltd, Rs11.04 billion from Attock Gen Ltd, Rs9.24 billion from Liberty Power and Rs3.79 billion from Atlas Power Limited. The committee also suggested that the tariff may be revised within 60 days.

He observed that the IPPs did not provide factual information to Nepra and since the establishment of IPPs the power regulator did not check their heat rate. IPPs have collected Gas Infrastructure Development Cess (GIDC) from consumers but did not deposit in government account, it observed.

A committee under chairman Competition Commission of Pakistan (CCP) was constituted with technical and experts as its members to look into it and submit a report on it in three months.

Minister for Energy Omar Ayub Khan said that after studying the report of the sub-committee on IPPs, he would inform the standing committee. He said the government had reviewed the GIDC issue and it is in the court of law now. He said that in Pakistan Peoples’ Party (PPP) tenure, the government had exempted two companies out of six, while four are registered and have no hidden accounts.

Companies started collection of GIDC in PPP time, aimed at financing Iran-Pakistan gas pipeline construction. Managing Director of the National Engineering Services Pakistan (Nespak) said that Nespak was formed in 1973 with a government’s grant of Rs0.5 million for construction of Tarbela dam tunnel. It also has association with foreign companies.

He said that Nespak has so far worked and completed 3,944 projects (3055 local and 523 foreign). Currently, it is working on 331 local and 35 projects in foreign. It is working on 12 projects in Qatar, nine in Saudi Arabia, eight in Oman, two each in Nigeria and Jordan and one in Afghanistan.

Senator Nauman Wazir while praising the work of Nespak and suggested that instead of foreign consultants, Pakistani consultants should be hired on projects. MD Nespak said that those projects that have foreign donors’ financing, foreign consultants are hired under their conditionality.

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