KARACHI, Jan 25: A California-based firm which made a commitment with the Karachi Water and Sanitation Board (KW& SB) authorities about two years ago has refused to install a 35MW gas power generating plant at Dhabeji. The firm is likely to go scot free because of a legal loophole.

A highly placed KWSB official said the company signed a letter of intent with the KWSB authorities, but now the company has refused to install the power generating plant. Meanwhile, nearly two years have passed, and a fresh tender would have to be floated.

The KWSB decided on a project two years ago to control and reduce the electricity cost incurred on pumping water from the source to the distribution system. It opted for its own power generation. “The KESC is presently charging Rs5.22 for per unit. The KWSB power plant would have reduced the cost to Rs3.97. Thus the KWSB could save Rs20 million per month. The KWSB is paying Rs160 million in power bills every month.

The official said as there was no proper agreement between the two parties the company could not be sued.