load shedding details pepco

8/8/2019 Load Shedding Details Pepco

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LOAD SHEDDING --- RENTAL POWER PLANTS

The power demand is about 14,680 MW and current supply is 10,200 MW i.e. short fall of4,480 MW providing fertile grounds for social and economic chaos. PEPCO installedcapacity is:ACTUAL GENERATION CAPACITY PRESENT AVAILABLE GENERATIONHydel 6500 MW 6400 MWThermal 6200 MW 2000 MVIPPs 6250 MW 4500 - 500 MW (1500 MW Short Fall

due to circular debt)RPPs 2250 MW (1100-1200 MW

is to be commissioned in aperiod of six months)

Contracts for RPPs were signed in 2008-2009 (Six months maximum period andextensions are been granted without any penalty which is indirect benefit to suppliers.A brand new car would cost 10 lacs but after use for ten years its depreciated cost wouldbe about 1 lac conversely on payment invoices the cost has been as Rs. 10 lacs but theactual payment is Rs. 1 lac Thus actual saving is about 9 lacs This is an example to showthat in case of RPPs who are mostly 10 - 15 years old payment has been shown ininvoices for the new ones but the actual payment is far less as per table shown attached.

where is the money difference between new and old payment invoices has gone which isin billions as also contended by Faisal Saleh Hayat in a Munazra on ARY where he washolding in his hand a Holy scripture and saying these facts on but when he asked theMinister Water and Power to hold the scripture in his hand and refute all these facts.Since it became a disputed matter there was no alternative left for the Prime Minister torefer it to the third party that was selected as Asian Development Bank.The objections and salient features of ADB and reply by WAPDA as under

OBJECTIONS BY ADB

1. No transparency in the selection ofRPPs.

2. Government is not fully utilizing theIPPs and captive power potential,hence no justification for RPPs.

3. Government is wasting hugefinancial resources in RPPs 14%advances to the RPPs.

4. RPPs more expensive than the new

IPPs and much more expensivethan the existing IPPs.

REPLY BY GOP / PEPCO

1. Incorrect. All RPPs have beenselected on the basis ofInternational Competitive Bidding

process (ICB)

2. Incorrect. IPPs already are on theoptimum capacity. Captive powerstory is misreported

3. No GOP money is involved in RPPs.GOP is only paying rental price ofthe service and 14% in advanceshall be adjusted against mutuallyagreed rent.

4. RPPs are comparatively expensive

than IPPs average price, mainlybecause IPPs utilize latesttechnology have greater efficiencydue to combined cycle plants.Contrarily, RPPs are simple cycleand refurbished / second handplants meant for quick delivery.RPPs life span is 3-5 yearscompared with the IPPs 25 yearslife cycle.


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5. Government would not be able topay the subsidies on account ofheavy tariffs of RPPs, hence circulardebt would reemerge.

5. In view of the GOP's initiative inhydropower generation, refurbishingGENCOs and emphasis on wind coaland renewable technology - combinedwith tariff rationalization measures - thelikelihood of circular debt reemerging isremote.

The above replies are fabricated, vage and inconclusive; probably the GFR (GovernmentFinancial Rules) have not been consulted.

1. As regard transparency Karkey (turkey) 231-MW for Karachi and Walters 205-MW forKarachi have been purchased at the cost of USD-564.64 millions and USD-325.89millions the cost per unit in case of Karkey would be Rs. 13.61 per unit and in case ofWalters it will be Rs. 16.93 per unit. For Satyana road Faisalabad RPP is 200-MWpurchased USD-111.15 millions which means the Karachi plants are times more costlythat is almost 300%. So where is the transparency?

2. As regard captive plants that is Sugar, Cement, Textile, Fertilizers etc surplus power ofabout 4000 - 5000 MW is easily available which has been recently negotiated by the

Prime Minister with the help of Chief Ministers in the recent energy meeting held inIslamabad. Thus no misreporting rather the reply is a skullduggery and is a staple offiction.

3. If no GOP money is involved in purchase of RPPs then who is financing it, I wouldadvise to consult GFR where every penny recovered from the public in the shape of taxor electricity bills its a GOP liability and thus GOP money. This is a misleading statement,would the supporters of RPPs would pay from their own pocket.

4. This point has already explained in Para 1 and sufficient to open the eyes of RPPsupporters. As regard payment of 7% to 14% no amendment has been made in thecontract agreement and the economic experts and engineers feel that by allowing 14%advance payment to the RPP suppliers is undue favor not in under the law. It means that

the suppliers of RPPs had already recovered their cost. Moreover the agreements weresigned in 2008-09 and the delivery / commissioning period was 6 months to 1 year;where is that? Undue extensions allowed which is undue favor to RPPs suppliers andincreasing the misery and agony of public and industry which is substantial, social andeconomic decline of the country.

It is considered that the existing system has an unutilized capacity of 2000 3000 MW,which is not available on account of nonpayment to IPPs and inefficiency on the part ofGENCOs. Consequently, RPPs are not needed at all.

In para 4 of the objection raised by ADB, GOP/PEPCOs reply is very pertinent fromtransparency and audit point of view:

RPPs are comparatively expensive than IPPs average price, mainly because

IPPs utilize latest technology have greater efficiency due to combined cycleplants. Contrarily, RPPs are simple cycle and refurbished / second hand plantsmeant for quick delivery. RPPs life span is 3-5 years compared with the IPPs 25years life cycle.

Audit General has already carried out a detailed check of over invoicing aboutHUBCO/IPPs and following charges were worked out.

IPPs 6 centsCapacity 4 centsEnergy 2 cents


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RPPs 18 cents (Worked out by PEPCO)Capacity payment 10 - 11 centsEnergy payment 07 cents.

It can safely be assume that there is over invoicing of 238% in case of RPPs andtherefore in this particular case sage opinion og the Audit - General of Pakistan may alsobe obtained.

CIRCULAR DEBT, LOAD SHEDDING, ECONMIC CRISES, UNEMPLOYEMENT ANDAGONY OF THE PUBLIC

Up to 2001 WAPDA generation position was as under

Hydel 40%Thermal 40%IPPs 20%

Generation cost of WAPDA Rs. 3.4 - 4.0 per unitSelling cost to consumer Rs. 4.0 - 4.5 per unitProfit Rs. 0.5 - 1.0 per unit

I.e. 52 Billions unit per anum (52billions x 1.0 =Rs. 52.00Billions per anum)

PEPCO Performance

Hydel 30%Thermal 10%IPPs 60%

Generation cost is Rs. 9.19 per unitSelling cost to consumer Rs 5.78 per unit

Loss Rs. 3.14 per uniti.e. 52 Billions unit per anum (52billions x 3.14 =Rs. 177billions loss per anum)

THEFT / LINE LOSSES

WAPDA 25%KESC 40%

IMF / GOP / NEPRA had already increased the tariff by 64% in a period of 1.5 yearsstarting from 2009-10 and that is about Rs. 6.8 per unit and they are stressing the GOPto increase the tariff by 6% by getting the next trench of 1.5billions

The plea of PEPCO that FATA Government departments and Baluchistan, they are not inthe position to recover the bill from the consumers. This is not new episode for PEPCObut this id been done for the last so many years during WAPDA period and it as a regularfeature.

Despite WPADA shares of millions of rupees conversion into equity and injection ofmillion of rupees every now and then the circular debt is almost 150 billion. PEPCO cannot make payments to IPPs / PSO, hence full capacity of generation of IPPs andWAPDA's own thermal plants it is not in a position to fill in the gap between supply anddemand. High generation cost of PEPCO is because of getting costly powers from IPPs


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which is about 60%. The cost of per unit of PEPCO is in the range of Rs. 9 - 10 and untiland unless the generation cost is reduced PEPCO can not be a profitable organizationand give relief / respite to the public in high cost of tariff and lengthy load shedding.

SOLUTION

There are_____ of idle old power stations in the country that is Rawalpindi, Shahdra,Faisalabad, Multan (MESCO) and MGPS Piran Ghaib, Sakhhar, Kotri, Gudu, Jam Shoro,Skh. Maanda (Queta) where WAPDA can install 250-MW_____ 4 units Gas turbineaccording to the load of the city. This can be precured and installed at these sites in aperiod of 6 months to 1 year and almost all the staff and infra structure is alreadyavailable. This will add 7000-8000 MW in the system and the cost of gas turbine is almostRs. 2 -3 Billion. This expenditure can be met out of a new USD125million USAID energyprogramme will upgrade five major power stations and replace more than 11,000 tubewells producing water for agriculture, while boosting Pakistan's overall power productionby 10%. In the mean time as already negotiated by Prime Minister with the help of ChiefMinister in energy conference 4000-5000 MW may be purchased from Sugar mills,cement industry, textile industry and fertilizers, which will give respite to the public andwill be less costly than the RPPs.Capacitors may be installed at almost all the 132KV / 66KV grid stations supplying power

to the consumers. This will improve the power factor from 0.8 to 1.0 resulting in saving of400-MW

Whenever there is dribbling rain and even light storm 100 of feeders goes off. Why?Because no renovation and augmentation has been done in any company althoughmillions of rupees have been allocated in this head. the power infra structure should beupgraded with a modern efficient grid without such investment there will be no chance ofimprovement even if major generation facilities are built. The PEPCO owned powergeneration and distribution companies should be technologically and refurbished thusexercising about 1000-1500MW.

Unfortunately the top management has never worked in the power stations, grid, andsystem protection and even in distribution. And a CV or track record of PEPCO's

management would show their capabilities because you will find them on the TV talks,offices and during field and under construction power plants inspections otherwisewearing costly suits ties etc. looking "Baboos" instead of Engr. I have seen myself in mytenure as Dir. finance WAPDA that Saeed Akhtar Niazi, MM Chandio, A Rasheed Kakarin "Daangrees" day and night to remove the faults. I would suggest a think tank of MS.Saeed Akhtar Niazi (ex-Member Power0, Tanzeem Huasin Naqvi (Ex- member power)and Mr. Abdul Rasheed Kakar (Ex-MD Transmission and generation) Skh. Miraj Ahmed(Ex- MD. expert and distribution) and of course Maxwell Donaldson (Ex0-GMProtection).and this management may be asked to get guidance from them as they arenot real assets but are very honest officers.

load shedding details pepco

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