ISLAMABAD, Jan 15: The Sindh government has hit back at the federal government and the National Electric Power Regulatory Authority (Nepra) on the issue of finalisation of electricity tariff for coal-based power projects in Thar and demanded an opportunity to present its case before the cabinet’s Economic Coordination Committee.
In a communication sent to the federal government, the Sindh government claimed that Nepra’s tariff determination of 7.8 cents per unit for a 1000MW project was based on a study conducted in 2004 and most parameters since then had changed significantly due to which it was difficult now to find manufacturers for the technology and equipment because of China’s heavy orders.
“This erroneous approach was adopted in the case of Wind Energy while announcing upfront tariff and has not been successful as the ground realities in connection with the pricing of equipment did not work out as per the market, thus the revision in the tariff and the delay in the setting up persists,” said a letter written by the provincial government to the secretary of water and power.
The provincial government claimed that assumptions used by Nepra using India as an example could not be compared since the neighbouring country had its own manufacturing facilities and its mining was shallow than Pakistan’s deep mining. “It is the considered view of the Sindh government that no investor will step in for coal-based power plants if the basis of determination” are as assumed by Nepra. “The tariff determination of 7.8 cents is not acceptable to Sindh and we would like to plead our case before the ECC,” said the letter.
In a separate note, the provincial government claimed that Nepra had not accepted Sindh’s position that capital cost estimates were not available for the project and added that “Nepra has allowed upfront tariff for wind energy which they have had to revise twice as it was based on a myopic estimation”.
The provincial government claimed that it was a matter of record that the government had to waive all its conditions for the fast track projects based on oil and offered a tariff with built-in incentives. “These incentives had to be revised and tariff related indexations demanded by the investors accepted. The efforts of the government to create fast track capacity expansion also did not pay dividends, we agree to too little too late,” it said.
The Sindh government said that according to the decision taken at a meeting presided over by the minister for water and power, Nepra had claimed to have sufficient documents to substantiate its determination of 7.8 cents tariff, but the assumptions of the Sindh government were not discussed.
