ISLAMABAD: The Ministry of Water and Power on Tuesday hit back at the KfW, a German government-owned development bank, for “scandalising” its power sector turnaround story, but slightly changed its claim towards increased generation and savings in fuel.

The ministry has expressed its concern over the way some analyst in KfW “has rushed to refute, rather scandalise, the claims” in ministry’s advertisement, it said in a statement.

The ministry “had not claimed achieving 25 per cent efficiency which is higher in overall generation mix of Gencos [generation companies],” it claimed increase in generation by 25pc, it added.

In its announcement a few days ago, the ministry announced: “With 25pc increase in power generation since 2013 we have touched 16 billion units annual generation in 2016, thanks to efficient fuel consumption regime and effective controls.”

This was questioned by the KfW which said such big gain through efficient fuel consumption and effective control was “applauding” and hence the claim was politically influenced. The German lender had pointed out that additional generation had come from new plants and output from existing plants had in fact gone down.

The ministry deplored that the KfW did not refute figures reported by the ministry but attempted to taint its performance with “conjectures and twisted analysis”, and that the analysis released to the media was in “indecent haste” and against the norms of the development agencies as the ministry was not contacted to either ascertain the authenticity of facts or discuss its findings.

Rejecting the KfW analysis as “lacking professional competence’, the ministry said professional analysts would have examined the data showing that Muzaffargarh plant was rehabilitated in 2013 with technically improved efficiency but could not achieve its financial benefits in the coming years until 2015.

It said there was now digitised fuel receipt and inventory system at Muzaffargarh which reduced oil pilferage, “which used to be the scandal for the past many years... and how this has hurt interest of the mafia” earning billions from this organised theft. “The claims of success on this account by the ministry hits into the heart of that mafia,” it added

The ministry claimed that the Muzaffargarh plant generated 4.311 gigawatt hours (GWh) in 2014-15 and 4.645 GWh in 2015-16, thus registering an increase of 7.75pc from its aging units. The generation at Muzaffargarh in 2014-15 consumed 1,285,556 tonnes of oil and would have required 1,384,210 tonnes of oil for the increased generation in 2015-16 if the fuel consumption efficiencies had not improved and pilferages not checked.

“Thus, a massive saving of 99,079 tonnes was achieved in a year, amounting to Rs3.28 billion ($31 million) in reduced oil imports,” it said.

In any given power generation regime, the operator has to run maximum capacity in peak hours and to reduce it in non-peak hours. Such reduction in generation, in any efficient system must come by closing plants with high generation costs. The older Genco plants being on the lower end of the efficiency chart are thus shut down for more hours than the efficient plants.

The fact that these plants have still achieved an increase in the overall generation by 25pc was due to the fact that the overall loadshedding was brought down from 12 to 15 hours in 2013 to three to four hours by the end of 2016. The use of less efficient plants will further reduce in the coming years as more efficient plants come into the system in 2017 and 2018 and improve basket price for consumers.

Published in Dawn, March 8th, 2017