April 15, 2008	Tuesday	Rabi-us-Sani 8, 1429

KARACHI, April 14: The Karachi Electric Supply will hire two power plants of 200 megawatts each within the next six months to improve power generation on a fast-track basis.

In the meantime, the utility will keep getting 500MW from the Pakistan Electric Power Company to meet the city’s electricity demand.

This was decided in a meeting chaired by Federal Water and Power Secretary Ismail Qureshi and attended by the heads of KESC, Pepco and Water and Power Development Authority, held at the KESC headquarters here on Monday. Besides other issues, they also discussed the matter related to conflicting claims of the KESC and Pepco over outstanding dues.

According to the federal secretary, the KESC will acquire the power plants with a total power generation capacity of 400MW on rent. A Saudi company will provide necessary funds for the rental projects, as it feels that such special funding is required to overcome Karachi’s electricity problems.

One of these plants would use furnace oil while the other would be operated on gas, he said, adding that a sub-committee had been set up to identify locations suitable for the installation of the plants and finalise deal with the prospective providers.

It is still not known from where the KESC will get these plants. However, sources said that the Independent Power Producers (IPPs), which had earlier planned to install a power plant in Nooriabad, would provide these plants. In a press conference held on April 7, Federal Water and Power Minister Raja Pervez Ashraf had stated that Pepco would install a rental power generation unit of 140MW in Nooriabad for providing electricity to Karachi.

Things would largely depend on the cost of energy, and other terms and conditions, especially in view of the rising cost of furnace oil and the Sui Southern Gas Company’s readiness to provide the required quantum of gas to operate one of the plants.

Skepticism prevailed over decision to acquire two rental power plants within the next six months because the KESC has not been able to sign tenders for setting up 528MW power plants on the premises of Bin Qasim Power Plant which the KESC was saying would be available this year.

Sources said the KESC, after making the payment of some of the Pepco dues, was still required to pay Rs1.2 billion to Pepco and the NTC. The issue of outstanding dues will be taken up in a meeting of another committee headed by Wapda chairman on Tuesday.

This would be a follow-up of the April 7 meeting chaired by Federal Water and Power Minister Raja Pervez Ashraf in which three committees were formed. One of the committees, headed by Wapda chairman Shakeel Durrani, was assigned the task to look into the ongoing financial dispute between the KESC and Pepco and submit its report within next 10 days. It was asked to suggest measures for resolving the issue that resulted in disconnection of power supply by Wapda. The implementation committee, headed by the water and power secretary, will implement all decisions over the next six months.

In view of negative political fallout of the recurring power outage, pressure was mounting on the KESC’s privatised management to enhance its generation besides ensuring firm commitment from other sources to meet the power demand.