09 August 2004	Monday	22 Jamadi-us-Saani 1425

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ISLAMABAD, Aug 8: The government is planning to hire an American company to complete a $250 million gas-fired power project in Karachi capable of producing 200 megawatts of electricity within the next nine months, officials said.

The project would be part of 'Emergency Plans for Injection of Additional Electricity in KESC system' prepared by the power utility under directives of the President's secretariat to ensure at least 200 megawatts additional electricity in the KESC's system by April 2005.

"Such a severe energy problem is foreseen in Karachi and elsewhere in the country that we have to set aside rules and regulations specified under the 2002 power policy to complete at least the 200MW project at Bin Qasim on a war footing," explained a senior government official.

This will be in addition to another 200MW private sector project being processed by KESC management to be developed by the Defence Housing Authority without any prior approval of the Private Power and Infrastructure Board (PPIB), which is a government-designated one-window agency to process power projects.

The official said serious objections had been raised by the planning commission and the board of investment on the grounds of ensuring transparency at a recent meeting but were overruled by the minister for water and power.

The demand of the two organisation to hold international competitive bidding as required under the law should be organised to get a competitive tariff was also rejected on the grounds that it will result in wastage of time.

According to recently revised official figures, "KESC has indicated a shortfall of more than 600MW in its system during the current fiscal year and (is expected to increase to) 1,260MW by 2009-10".

Wapda has also informed the government that shortages in its system would be about 1,000MW by next year and the demand/supply gap would widen every year. The current total shortage in both Wapda and KESC system amounts to over 1,500 megawatts, the officials said.

The official said that nobody other than the government should be blamed for the emergency situation because it failed to foresee the shortage for the past five years. Now, they added, it was left with no option but to resort to fast track development of projects like the PPP government had done in 1994 and ended up with finalizing agreements in haste that resulted in high energy prices.

He criticized the military authorities who had been managing the two power utilities for the past six years and said that they failed to forecast the shortage and develop projects to generate electricity at cheaper rates.

KESC's board of directors has decided to go for a barge- mounted project as it could be undertaken on "war-footing basis". The board contended that the US-based GSB Technologies had the capacity to establish the plant and requested the federal government to grant a "waiver of normal procedure to reduce the execution time and to meet the April 2005 target time".

The ministry of water and power has agreed with the KESC's contention that "GSB's unsolicited proposal be entertained," the official said. For this, the KESC has confirmed to offer to GSB the required land, provide its oil storage facilities and cooling water and was even ready to forego 35 million cubic feet of gas per day for three months i.e. from April to June.

Sources said the National Electric Power Regulatory Authority was also asked to reduce its tariff determination time to less than three months for the project but was turned down by the Nepra.