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Hubco-Wapda drawing close to end

  1. SBP Report on Pakistan's economy
  2. Shortfall in sugar production?
  3. Construction of Kohat tunnel
  4. HUBCO-WAPDA drawing close to settlement
  5. MAP seminar on industrial development
  6. Economics of production and costs
  7. E-Commerce and IT (PAGE Report)

KESC joining the list of intevested posties

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 Hubco.