RESTRUCTURING THE POWER SECTOR
The NEPRA has announced an invitation from 'world class' companies last month for a comprehensive study in this connection
By AZAM ALI
Dec 13 - 19, 2004
The Government of Pakistan has started planning a new structure of power generation and distribution in the country through its National Electric Power Regulatory Authority (NEPRA), in order to have and optimized generation expansion plan (Cost Generation Expansion Plan) of National Transmission and Dispatch Company (NTDC) upto 2025.
The NEPRA has announced an invitation from 'world class' companies last month for a comprehensive study in this connection. The companies or a company would include the works; the study will identify the preferred sites and location for Siting Generation Plants, complete study in 'Electric Utility Management' integrated grid operation, Power system planning and designing. The cost of the project has been left as 'negotiable' depending on the various factors.
The project has been announced in the light of an unnatural growth of some cities including Karachi, Lahore, Hyderabd, Peshawar and Quetta. A dozen of more cities of the country are stated to become an integral part of the country during next 20 years. The KESC had also given a contract to private companies for the study of consumer behavior and power crisis in Karachi in order to reduce power theft. But the report is stated to be a confidential document.
The State-run Water and Power Development Authority (WAPDA) will most likely be unable to fulfill Indian demand to supply 1,000 mw of electricity to an Indian firm, since Pakistan will face an electricity shortage by 2005-07 due to rising domestic consumption, a government official told PAGE.
Following the recent SAARC Summit, an Indian company Barmako, contacted Pakistan for the import of 1,000 mw electricity for some areas in Rajasthan. There are many isolated areas in Rajasthan where the transmission network of the Indian power sector is not available. "This is the main reason why Barmako contacted Pakistan seeking the import of electricity from areas of Sindh which are adjacent to the border," the official said. The Karachi Electric Supply Company (KESC) had earlier refused to fulfill the demand, saying it is already short of electricity and has no infrastructure near the Rajasthan sector, which would be needed to export the electricity. In fact WAPDA had been considering the Indian request as areas of Tharparkar, Mirpur Khas, Sanghar and Khairpur Ghotki in Sindh province receive electricity from HESCO (Hyderabad Electricity Supply Company), an unbundled entity of WAPDA, but the dessert area from where the electricity would be exported to India does not have the required infrastructure.
WAPDA has now told the water and power ministry that it will not be able to fulfill the Indian request as electricity availability projections show that country would be short of electricity by 2005-07 keeping in view future power demand. In order to meet the future power needs of the country, the government is also engaged in building two power projects — the 300 mw Balloki hydropower project and 150 mw thermal power project at Fasialabad. In addition, the government is also upgrading the Thermal Power Generation House of 1,760 mw in Karachi, which will increase capacity of by another 150 mw. Some years ago, India and Pakistan had negotiated the export of electricity to India, but the deal could not be finalized because of differences on tariff, as India wanted to import electricity at the rate of seven cents per unit. Pakistan's electricity demand currently stands at 10,000 mw while the production of electricity stands at 12,000 mw. Pakistan is already importing electricity from Iran for the areas like Taftan, Mashkal and Makran of Balochistan at a price of three cents (Rs1.80) per unit. The rate of tariff for Barmako's deal had not yet been discussed. The Indian company has just shown willingness to import electricity but it has not proposed any rates at which it wants to import.
The Privatisation Commission (PC) has set up a committee to address concerns of the Karachi Electric Supply Corporation (KESC) ahead of the bidding of the power utility. During a meeting the minister directed the commission to make arrangements for the launching of initial public offering (IPO) of 20 percent shares of Kot Addu Power Company (KAPCO) by the end of December.
The commission will start marketing campaign for KAPCO's IPO from mid-December in all major cities of the country. The ministry also asked the commission to line up IPO of the United Bank Limited (UBL) and offer it soon after the completion of KAPCO IPO. The meeting was informed that six parties have submitted expression of interests for acting as lead manager for UBL IPO and their pre-qualification would be completed during the week for appointment of lead manager. The ministry directed concerned officials to maintain the momentum of such public offerings with proper sequencing and to ensure the early completion of IPO's of State Life Insurance Company (SLIC) and Pakistan Steel Mills shares and other secondary public offerings.