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Deal signed to set up coal power plants

KARACHI, Aug 10: The Karachi Electric Supply Company (KESC) on Friday signed a Memorandum of Understanding (MoU) with a Hong Kong-based company sponsored by Chinese and Korean investors for setting up of coal power plants to generate up to 1,000 megawatts.

The MoU was signed by KESC Executive Director Syed Naveed Ahmad and Bright Eagle Enterprises Chairman Chen Ping on behalf of their respective companies in Hong Kong.

Briefing the media about the company’s past performance, profits and future plans of which enhancing affordable electricity power generation capacity is a major aspect, KESC Chief Marketing and Communications Officer (CMCO) Ghufran A. Khan, Executive Board Director & Chief Adviser Tayyab Tareen and Chief Financial Officer (CFO) Syed Moonis Abdullah Alvi said they were proud of bringing profits into KESC after seven years of privatisation.

The KESC had a day earlier announced a profit of Rs2.62 billion.

The officials said that it had been possible through various steps taken by the power utility including finding ways of more efficient power generation.

It was said that unlike India and Bangladesh, which relied more on coal and gas respectively for power production, Pakistan for some strange reason had selected the most expensive option of using furnace oil for the purpose.

The officials said the KESC was looking into more ways of cutting back costs in this department such as using gas and coal resources. Therefore, Bright Eagle Enterprise was brought into the picture to collaborate with the KESC for conversion of their 1,260MW Bin Qasim Power Plant-I from residual fuel oil to coal.

It was said that the KESC was also actively pursuing the Thar coal reserves for power generation under a joint development agreement with Oracle Coalfields of the UK and Sindh Carbon Energy signed earlier in June to set up a coal mine-mouth power plant. “Mine-mouth power plants would be even more feasible as they will save on money for transporting the coal. But right now when compared to the amount we are spending on furnace oil, we can even save nine to 10 per cent by using imported coal to generate power,” said the CFO.

Under the MoU the coal-based power plants from China would be established, commissioned and energised in Karachi on a fast track basis.

Pakistan is unique in its choice of generating power from furnace oil as the richest countries of the world such as Brunei don’t generate power from furnace oil but coal mostly. Wapda makes power from water. Hydropower is rather cheap, but it cannot cover the entire country’s demand, which amounts to around 17,000 to 18,000MW whereas the hydropower generated by Wapda is only 6,000MW. So the rest of the power generated by the other power utilities depends on furnace oil, which is just not feasible.

CMCO Ghufran A. Khan pointed out the problem with getting gas for power generation. “Both coal and gas are feasible options but we are constantly fighting with the government for supply of gas.”

It was said that the government was to provide the KESC 276 million cubic feet a day (MMCFD) gas but was only able to supply 130MMCFD to the power utility.