ISLAMABAD:
The Nawaz Sharif government has approved the revival of the Rental Power
Plants under the new name of Short-Term Independent Power Plants
(STIPPs).
The Economic Coordination Committee, which met here on Thursday with Finance Minister Senator Ishaq Dar in the chair, has accorded approval to the new policy under the subject of “Utilisation of the existing available generation capacity - short-term IPPs”.The News on March 22 broke the news that the government had decided to revive the Rental Power Plants (RPPs) under a new name to beat the power crisis.
The ECC has now approved the summary of the Ministry of Water and Power for utilisation of the existing available generation capacity from short-term IPPs subject to the fact that it is not in violation of the Supreme Court’s judgment announced on March 30, 2012.
It is pertinent to mention that the power generation equipment imported under another scheme was declared illegal by the Supreme Court of Pakistan in its judgment. In order to avoid obsolescence of such plants and machinery and to avoid monetary claims under arbitration, these plants and machinery can be utilised to add 200MW of electricity.
Those RPPs which will get clearance from the NAB will become short-term IPPs and then they will get tariff and generation licence from Nepra to generate electricity.
The more interesting disclosure is that the Ministry of Water and Power had worked out 400MW electricity to be generated, but now it has been decided that the government will get only 200MW of electricity from the STIPPs.
One of the top officials of the Ministry of Water and Power said the government wanted to oblige those RPPs which are their favourite ones and for this the ministry wants to clear the three RPPs that include the Gulf Power Limited (70MW), Reshma Power Limited (90MW) and Techno Power Limited (100MW) for short-term minister of water and power has approved this proposal. He said if it happens then there would be no level playing field for other RPPs, which can also be converted into STIPPs.
However, under the ECC decision, the project company will obtain generation licence and tariff determination from Nepra, which will also determine the terms and conditions of tariff. The tariff will be determined on take-and-pay basis and electricity actually delivered to the national grid.
The short-term IPPs may have an option to sell electricity to the bulk consumers like housing societies, industrial parks, etc. without the government guarantees and obligation of the public entities to buy all of the generated electricity. As per the summary the term of the Power Purchase Agreement (PPA) will be of 3 year and the draft of PPA will be prepared by NTDCL for short-term IPPs for approval of the ECC. The project company will have to obtain ‘no objection’ certificate from NAB for utilisation of plant and machinery.
Unconditionally and irrecoverable waiver of claims of arbitration against the government and its entities shall be eligible under the short-term IPPs framework.
The ECC also approved export of 250,000 metric tons of sugar by sugar mills from the surplus sugar stock with conditions that export quota will be allocated on first-come-first-served basis; export may be made against irrecoverable letter of credit or a contract with 25% non-refundable advance payment and that shipment may be made within 45 days of the registration of contract with the SBP, and the non-refundable advance payment to be forfeited in favour of the government of Pakistan in case of non-performance.
The official said that the country has surplus sugar which the industry wants to export to ensure payments to the sugarcane growers.
In the meeting, the finance minister also directed ministry of industries and production to ensure outstanding payments to sugarcane growers by sugar mills in coordination with the provinces.
The ECC approved the summary of the Finance Division for import of 0.125 million tons of urea fertiliser for the incoming Kharif (April to September season) 2014 in order to meet the demand as recommended by the ministry of national food security.
This import will not impact the foreign exchange reserves, as it will be done through ITFC. The finance minister on the occasion said that the earlier decision of the ECC to maintain the retail price of Rs1786 per bag must be ensured in the local market.
He said the ministries of food security and industries & production should work in coordination with the provinces for the agreed price. The ECC also constituted a four-member committee comprising ministers for water and power, petroleum and natural resources, food security and industries and production to sort out the issue of supply of required gas to the local urea manufacturers.
The ECC approved the summary of the Aviation Division for release of an amount equivalent to US $29.9 million to PIAC for acquisition of aircraft on dry lease. PIA intends to lease eight A320S offered by Qatar Aviation Lease Company through international tender. These aircraft will be available from April 2014. The minister cautioned the management of PIA that it cannot go outside the tender and should ensure that all the requirements are met and relevant rules must be followed.
The ECC also considered the summary of the ministry of commerce regarding lifting of ban on the import of gold. The ECC directed the Commerce Ministry to resubmit the summary, incorporating the guidelines provided by ECC, in the third week of April for consideration.
The Economic Coordination Committee, which met here on Thursday with Finance Minister Senator Ishaq Dar in the chair, has accorded approval to the new policy under the subject of “Utilisation of the existing available generation capacity - short-term IPPs”.The News on March 22 broke the news that the government had decided to revive the Rental Power Plants (RPPs) under a new name to beat the power crisis.
The ECC has now approved the summary of the Ministry of Water and Power for utilisation of the existing available generation capacity from short-term IPPs subject to the fact that it is not in violation of the Supreme Court’s judgment announced on March 30, 2012.
It is pertinent to mention that the power generation equipment imported under another scheme was declared illegal by the Supreme Court of Pakistan in its judgment. In order to avoid obsolescence of such plants and machinery and to avoid monetary claims under arbitration, these plants and machinery can be utilised to add 200MW of electricity.
Those RPPs which will get clearance from the NAB will become short-term IPPs and then they will get tariff and generation licence from Nepra to generate electricity.
The more interesting disclosure is that the Ministry of Water and Power had worked out 400MW electricity to be generated, but now it has been decided that the government will get only 200MW of electricity from the STIPPs.
One of the top officials of the Ministry of Water and Power said the government wanted to oblige those RPPs which are their favourite ones and for this the ministry wants to clear the three RPPs that include the Gulf Power Limited (70MW), Reshma Power Limited (90MW) and Techno Power Limited (100MW) for short-term minister of water and power has approved this proposal. He said if it happens then there would be no level playing field for other RPPs, which can also be converted into STIPPs.
However, under the ECC decision, the project company will obtain generation licence and tariff determination from Nepra, which will also determine the terms and conditions of tariff. The tariff will be determined on take-and-pay basis and electricity actually delivered to the national grid.
The short-term IPPs may have an option to sell electricity to the bulk consumers like housing societies, industrial parks, etc. without the government guarantees and obligation of the public entities to buy all of the generated electricity. As per the summary the term of the Power Purchase Agreement (PPA) will be of 3 year and the draft of PPA will be prepared by NTDCL for short-term IPPs for approval of the ECC. The project company will have to obtain ‘no objection’ certificate from NAB for utilisation of plant and machinery.
Unconditionally and irrecoverable waiver of claims of arbitration against the government and its entities shall be eligible under the short-term IPPs framework.
The ECC also approved export of 250,000 metric tons of sugar by sugar mills from the surplus sugar stock with conditions that export quota will be allocated on first-come-first-served basis; export may be made against irrecoverable letter of credit or a contract with 25% non-refundable advance payment and that shipment may be made within 45 days of the registration of contract with the SBP, and the non-refundable advance payment to be forfeited in favour of the government of Pakistan in case of non-performance.
The official said that the country has surplus sugar which the industry wants to export to ensure payments to the sugarcane growers.
In the meeting, the finance minister also directed ministry of industries and production to ensure outstanding payments to sugarcane growers by sugar mills in coordination with the provinces.
The ECC approved the summary of the Finance Division for import of 0.125 million tons of urea fertiliser for the incoming Kharif (April to September season) 2014 in order to meet the demand as recommended by the ministry of national food security.
This import will not impact the foreign exchange reserves, as it will be done through ITFC. The finance minister on the occasion said that the earlier decision of the ECC to maintain the retail price of Rs1786 per bag must be ensured in the local market.
He said the ministries of food security and industries & production should work in coordination with the provinces for the agreed price. The ECC also constituted a four-member committee comprising ministers for water and power, petroleum and natural resources, food security and industries and production to sort out the issue of supply of required gas to the local urea manufacturers.
The ECC approved the summary of the Aviation Division for release of an amount equivalent to US $29.9 million to PIAC for acquisition of aircraft on dry lease. PIA intends to lease eight A320S offered by Qatar Aviation Lease Company through international tender. These aircraft will be available from April 2014. The minister cautioned the management of PIA that it cannot go outside the tender and should ensure that all the requirements are met and relevant rules must be followed.
The ECC also considered the summary of the ministry of commerce regarding lifting of ban on the import of gold. The ECC directed the Commerce Ministry to resubmit the summary, incorporating the guidelines provided by ECC, in the third week of April for consideration.
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