MUSHTAQ GHUMMAN
ISLAMABAD: Minister for Water and Power Khawaja Asif said on Monday that payment of Rs 480 billion was made to the Independent Power Producers (IPPs) after an audit and now it is a closed chapter.
He was addressing a press conference along with outgoing Secretary Water and Power Younas Dagha and newly appointed Secretary Water and Power Yousaf Naseem Khokhar. He said that power load shedding will be ‘normal for April’ as 4000-4500 MW electricity will be back into the system soon. Presently, electricity shortfall is hovering around 5420 MW.
“I am receiving load shedding complaints for the last 10-15 days which is legitimate and we do not deny it but some facts are not being reported properly. Media should be informed so that masses are informed. I want to correct some facts regarding the power sector,” the Minister stated.
While explaining the government’s position on IPPs, he added that one issue which is being highlighted again and again namely that the government has not paid its dues to the Independent Power Producers (IPPs) which is why they are not running at full capacity is inaccurate as IPPs were producing 8007 MW at 12 o’ clock on Monday which is a record. Public sector generation companies (Gencos) were producing 2836 MW which is also a record.
“IPPs and Gencos are outperforming for the last 10-15 days which shows that IPPs are running at full capacity contrary to media reports,” he added.
However, plants of more than 1200 MWs i.e. Rousche, Uch II, Chashma 1 and one unit of Hubco etc are on scheduled maintenance and will be back this month.
The Water and Power Minister said that these power plants will start production by end of April. An additional 1000MW of hydel electricity and overall 4000- 4500MW of electricity would be added to the national grid after which there will be a significant decrease in load shedding. He claimed that an increase of 1000-1500 MW will be witnessed in April due to snow melt whereas plants which are shut down due to scheduled maintenance will also start generation, which would add another 2700-2800 MW to the system.
Khawaja Asif claimed that the Petroleum Ministry has also promised to supply gas to 525 MW Nandipur power project by the end of the current month. Besides 400 MW will be due to a rise in generation capacity of Guddu thermal power plant.
“Normal gap in generation and demand will exist for sometime but we will bridge the gap. Load shedding will be back to 3-4 hours in urban areas and 5 hours in rural areas,” he claimed.
Water and Power Minister also claimed that industry is exempted from load shedding on dedicated feeders since 2015.
Khawaja Asif accused the media of partial reporting of facts pointing to media claims that load shedding was upto 10- 12 hours adding that this would continue in those areas where recovery is only 10 per cent. “There are areas which we have de-electrified and removed their transformers as they steal electricity. Power theft is in all provinces including Punjab and the thieves have no specific area of residence,” he said.
He said due to this policy decision social pressure has increased on electricity thieves prompting many to get electricity meters installed and theft volume has substantially declined.
The Minister further claimed that recoveries have improved from 88.6 per cent to 93.8 per cent from 2014 to 2016. Losses have also declined from 19.1 per cent to 17.9 per cent due to which Rs 116 billion additional cash has been available to the power sector.
According to the Minister of Water and Power, demand was 17970 MW at 12:15 pm on Monday which is again a record in April as compared to 15691 MW during the same month last year which implies an approximate rise in demand of 2000 MWs in April this year. In April 2016, generation stood at 11490 MW which has increased to 12550 MW which implies that generation has increased by 1000 MW during the year. This shows a shortfall of 5420 MW.
IPPs were producing 6217 MW in April last year which has increased to 8,000 MW, showing an average increase of 1500 MW if we compare April this year with April last year.
He said hydel generation was 2000 MW in April 2016 which has increased to 2100 MW this month. It was around 1400 MW during the last few days.
He insisted that April should be compared with April the year before and not with May or June.
The Minister said that temperatures were high with 42 C (in Sukkur and Jacobabad) during the last days of March and the first few days have witnessed historically higher temperatures by 4 to 6 C. In Peshawar, it was 10 C higher than in 2016 (33 C against 23 C). In Islamabad, it was 10 C higher than in 2016 (33 C against 25 C) and in Multan, it was 4 C higher than 2016 (38 C against 33 C).
Asif rubbished claims that Independent Power Producers (IPPs) are not producing at capacity. He stated that electricity demand in April-2017 has gone up by 2000MW when compared to the same period of the previous year.
Talking about circular debt, to Water and Power Minister said the government has to pay Rs 440 billion to the IPPs. He clarified that total circular debt stock was Rs 385 billion as of March 31, 2017, of which Rs 163 billion has to be paid to the IPPs including Rs 56 billion to PSO, a capacity payment of Rs 54 billion, totaling Rs 217 billion. And if Rs 56 billon of PSO is excluded, the total IPPs receivables are Rs 161 billion.
“The Federal government owes Rs161 billion to IPPs of which Rs 69 billion are under litigation which implies that total clear cut amount due of IPPs was Rs 92 billion,” he continued.
According to the Power Purchase Agreements (PPAs), IPPs have banks’ limits to procure fuel at Kibor plus 4 per cent.
“If the government is unable to pay the IPPs, they can raise money from the banks as per the PPAs on which the government pays Kibor plus 4 per cent to the IPPs,” he further added.
Khawaja Asif however failed to provide overdue amounts of OGDCL, SSGC and SNPGL.
Asif said that some areas have been de-electrified due to non-payments. He said that there is no load shedding for industrial sector since October, 2015.
He said solar tariff has come down from Rs 17 per unit to Rs 6 per unit, wind tariff has been slashed from Rs 15 per unit to Rs 6.50 per unit, RLNG tariff from Rs 9.5 per unit to Rs 6.6 per unit whereas coal tariff will come down from Rs 8.5 per unit to Rs 7 per unit. “Tariffs from all power generation sources have come down,” he added. Neelum Jehlum will start generation during the early months of 2018 and will be operating at capacity by mid of 2018.
When asked how the Ministry could claim that tariffs have been brought down while it failed to notify Rs 1.50 per unit reduction in consumers end tariff, the Minister, on an obvious tip from the outgoing Secretary Water and Power, said that it’s a sub judice matter and that the Ministry will give its reply in court.
Replying to a question on the payment of Rs 480 billion to the IPPs, Water and Power Minister said that payment of Rs 480 billion was audited. When Water and Power Minister sends claims to the Finance Ministry they are duly audited/ verified and Ministry of Water and Power takes full responsibility for that. He said special audit has also been conducted on the directives of Public Accounts Committee (PAC). However he added that some of his political colleagues ‘mention it as a passing remark’. He said payments to IPPs, PSO, SSGC and SNGPL were verified for 2010, 2011, 2012 and 2013 and stated that when the PAC conducted the special audit of Rs 480 billion to the IPPs which includes payment of Rs 32 billion without producing a single unit also came under discussion. This chapter is closed now, he insisted.
The Minister said that improvements in power have been made during the two- year tenure of Younas Dhagha as Secretary Water and Power.
When it was pointed out that four years ago when PML (N) came into power electricity shortfall was 5000 -7000 MW whereas shortfall today also stands at Rs 5500 MW, the Minister said that duration of load shedding has been reduced by 50 percent. He said 4000 MW will again be added to the system during this month. He also cited the survey of Gallop Pakistan according to which 65 per cent accepted that load shedding has declined whereas 9 per cent claimed that load shedding has ended.
Answering a question about the letter of Chief Minister Sindh Syed Murad Ali Shah regarding cut in water share of his province, Water and Power Minister said that it’s a political issue, adding that Khurshid Shah who is also a serious politician, has also talked about this issue.
“Irsa maintains the record of inflows, outflows and reservoirs. Sindh is duly represented in the body and incumbent Chairman is from Sindh. Let him speak as Chairman and Member of Sindh. Both Khurshid Shah and Murad Ali Shah should first enquire from Member Sindh and verify their statements and if he does not verify their statements, this implies that those statements are not accurate,” he said.
Answering a question, the minister said that arrears of government departments are deducted at source in June. The main issue is of AJ&K as there is a difference of Rs 72 billion at this moment whereas more than Rs 100 billion is due from Balochistan against agriculture tube-wells. Both federal and provincial governments are ready to contribute their share but the owners of agriculture tube-wells are not ready to pay.
In reply to another question, the minister praised the performance of outgoing Secretary in Water and Power Ministry Younas Dhagha who has now been transferred to Commerce Ministry, “which is equally important”. He said exports problems exist in Commerce Ministry, and he hopes Dhagha will give similar performance in Ministry of Commerce. The minister said the government will honour its commitment to end load shedding.
Replying to a question on K-Electric, Water and Power Minister said that it is a private company with a 24 per cent share of Government of Pakistan. Water and Power Ministry is negotiating with the K-E management that payables should be settled before its sale after which the government will issue a clearance certificate. Nepra has given provisional tariff to KE which has the right to challenge it, he concluded.
