Govt fails to benefit from Turkish power plant

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Despite the grave situation of electricity shortage in the country where the power demand has surged to over 6000 megawatts, the government is reluctant to fuel the newly installed 232 MW Turkish Rental Power Plant.
The ship-based plant has started its commercial supply and test generation of around 15 to 16 megawatts.
It can provide almost 270 MW at any time as all arrangements have been finalized. However, a continuing negligence and delay on part of the government in arranging the fuel supply for the plant, is depriving the national grid of at least 232MW, sources told Pakistan Today.
Official sources in the foreign company Karkey have confirmed that though the commercial operation of the plant has commenced since April 13 this year, the unresolved issue of opening of LCs for fuel purchase through advance payment by the government was hindering full supply from the plant. As arrangements are yet to be made by Pakistan Electric Power Company (PEPCO), the foreign company was unable to supply the contracted electricity despite having all arrangements to provide more than 270 MW, they said, adding that though the contracted supply of power was 232 MW, the barge-mounted power plant has the capacity to supply over 270 MW.
According to sources, under the agreement singed between the Turkish company and the government (PEPCO), Lakhra Power Generation Company, which will get power supply from the rental plant, was to arrange an advance payment for LCs or fuel for plant. But despite lapsing over five months, the facility was not available for the foreign company rendering the ship-based plant idle.
The plant was currently being run at a lower capacity of around 17 MW out of which 8 to 10 MW were being supplied to the national grid free of cost while the rest was consumed by the ship it self. The foreign company under the present situation was facing heavy losses, sources said.
“Though the power generating capacity in the country has already been reduced against the ever increasing power demand, the negligence on part of the government would further add the woes of people facing load shedding,” they added. It is worth mentioning here that the barge-mounted plant had arrived in Karachi on November 21, 2010 and inaugurated by the prime minister.
There was an extensive delay in completion of the project. The original contract was signed on December 5, 2008 and the amended agreement on September 16, 2009. Besides, the lack of fuel supply arrangements and that too for months, was the new issue faced by the foreign company. The daily fuel requirement of the plant was estimated to be about 1,500 tonnes with a stock for 21 days. Importing 45,000 tonnes of oil was also a huge task while opening LCs and guarantees to the banks in advance.
Earlier it was expected that the fuel supply agreement would be signed and the plant would start operation by the end of December 2010. The Turkey-based Karkey had submitted an advance payment guarantee of about $80 million towards a power ship for Pakistan to provide electricity to Genco-IV through KESC’s network at Korangi thermal power station. Besides an advance amount of 14 per cent, Rs6 billion for the total rental value of 232MW for five years has also been paid in advance to the company.
Interestingly, despite being installed in the sea at the Korangi site in Karachi, citizens there would not gain benefits through the new rental plant as the entire project was arranged by PEPCO and the supply of power from the ship was directly to connected to the national grid.