02 May 2004	Sunday	11 Rabi-ul-Awwal 1425

ISLAMABAD, May 1: The National Electric Power Regulatory Authority (Nepra) has rejected a request from the Privatization Commission to revise Jamshoro Power Company's (JPC) tariff determination from five year to nine years.

A senior Nepra official told Dawn on Friday that the power regulatory authority had set a five-year tariff for the JPC for the sale of its around 1,050-MW electricity to the National Transmission and Dispatch Company till June 30, 2009 when an independent Wholesale Electricity Market (WEM) is expected to come into operation.

The Privatization Commission had requested the Nepra to extend this period till June 30, 2013 so that private investors had a "clear cut and well-predictable environment" to participate in the privatization of the JPC and plan future investment and expansion plans.

The JPC, consisting of Jamshoro and Kotri power plants, is envisaged to be privatised during the next fiscal year. The privatisation commission is currently at an advanced stage of discussions with the pre-qualified bidders to finalize bidding schedule.

The official said the Nepra had issued its determination after holding a lengthy hearing process and taken into account relevant facts and figures submitted by stakeholders and then sought further clarifications and documents.

Hence, the Nepra could not revise its considered judgment on letters and out-of-the process requests otherwise its credibility would be eroded.

In the five-year multi-year formula, the Nepra has also included the cost of servicing of over Rs5 billion debt the JPC inherited from Wapda as part of its separation plan besides the operation and maintenance cost of its Rs26.2 billion assets.

The tariff also incorporated in the tariff a fixed 12.75 per cent after-tax rate of return on equity besides half-yearly adjustable and pass-through items like inflation, insurance, fuel cost variation etc.

The company was incorporated in August 1998 as a public limited company under Pakistan Companies Ordinance 1984.

The government plans to sell 51 per cent interest in JPC, including management control to a strategic investor or a consortium of strategic and financial investors.

Bidders have completed the due diligence of the company.