KESC joining the list of
From YOUSAF RAFIQ
Special Correspondent, Islamabad
Feb 21 - 27, 2000
The rhetoric between Hub Power Company and Water and Power Development
Authority may be at its peak of antagonism, but there are clear signs of this two-year old
row between the parties drawing to a close. The signs do not come in the form of more
reconciliatory statements either from the Chairman of WAPDA or the Board of Hub Power
Company but from the variety of options that are beginning to surface to end the dispute.
Of course litigation is one option, but an option that takes years because of its
immaculate and clearly defined ërules of the gameí. So this option may almost be out,
given the fact that people close to the Chief Executive General Pervez Musharraf are
convinced the new head of the republic wants the IPP roadblock in the way of investments
cleared. The sooner the better.
The latest, and the least publicised, development towards the
settlement of the row is the Karachi Electric Supplyís joining the list of interested
parties. This Correspondent learnt on good authority that KESC has approached the
management of Hubco asking them to look into the possibility of supplying 600MW of
electricity to Karachi. Of course that is not possible unless WAPDA agrees to the
proposition. But why would WAPDA come in the way if that is in the national interest. And
it seems the option might be in the best national interest.
Supply of 600MW to KESC would imply that Hubco puts up two more
generation units, taking the total number of its units to six. The four already
operational at Hubco plant near Hub generate 1292 MW of electricity. With two new units,
Hubcoís generation capacity will come to a total of about 1900 MW. And even better, the
two new units will not be oil-fired combined cycle units but gas fired units that are a
cheaper alternative and provide protection against currency fluctuations as Pakistanís
gas comes from its own fields rather than being imported in dollar terms like furnace oil.
If the deal goes through, Hubco will be selling more electricity and
thus sharing its plant costs over a larger number of units of electricity and therefore at
a cheaper price. Hubco will be in a position to lower its unit price as gas-fired units
will be a better and viable option.
PAGE has learnt that the deal is under consideration and none of
the parties knew how long before it is finally ready for signing. But KESC and Hubco have
had an initial feasibility of the proposed deal underataken by Nespak who have suggested
that all WAPDA needs to do is to lay transmission lines over a stretch of eight kilometres
and Hubco power will be ready for distribution in Karachi. WAPDA has to be made a party to
this deal as the Hubco Power Purchase Agreement stipulates that the company sells its
entire generating capacity to WAPDA.
The row between Hubco and the Government of Pakistan began in May 1998
when Ehtesab Bureau initiated investigations into alleged corruption charges against
Hubco. The dispute has continued to grow in complexity and size ever since Wapda
registered on September 3, 1998 two FIRs (first information report that leads to
investigations by police and a full-fledged criminal trial) leveling allegations fraud and
other cognizable offences against the entire Board of Directors of