ISLAMABAD, Nov 7: Synergics Energy Limited would submit detailed feasibility study of $1.4 billion Kohala Hydropower Project in February next provided the government protected its intellectual property rights, official sources told Dawn.

Synergics Energy, a US-based company was issued a letter of intent (LOI) for the development of 740-MW Kohala Power Project in Azad Kashmir two years back under the 1995 power policy. The company was required to submit the report by December this year but a dispute with Wapda over tariff delayed its finalization.

In a letter, the company has said that it would submit its detailed feasibility report to the Azad Kashmir government on two conditions. First, its intellectual property rights were protected — meaning that report would not be provided to other investors unless $6 million cost was paid to the sponsor.

Second, it would complete the project under the original LOI that ensured 4.7 cents per unit upfront levelised tariff over 30- year life of the project.

The proposed plant in Azad Kashmir is going to be the largest private sector hydel power project in South Asia. It required 16 kilometer long tunnel and a diversion from Seran village and powerhouse in Barasala. The project is to be linked to the national grid at Rawat near Rawalpindi through a 115 km long 500- KV transmission line.

The company has informed that if the implementation agreement (IA) and power purchase agreement (PPA) were signed in 2002, construction work could commence in 2004 and then the project would be completed in five years i.e. in 2009.

The company said that in view of the high risk project, open-minded discussion should take place between Azad Kashmir government, Wapda and the company on tariff and other issues to reach an equitable agreement with the private sector.

The company has also proposed that a high-level tariff committee should be constituted comprising experts of ministries of finance, water and power, private power and infrastructure board, planning commission, Wapda and AJK to finalize a tariff that is just and affordable to all the parties.

Synergics, that is also pursuing another $110 million 84-MW hydel power project in the NWFP, had a dispute with Wapda management over finalization of tariff.

Under the president’s initiative to attract foreign investment in water storage and hydro power projects, Wapda offered early this year to Dr. Hermut Kormani, the Germany-based chairman of Voith Siemens Group to undertake Matiltan project in the NWFP at a tariff of 4.3 cents per unit and Kohala project besides a list of another 16 projects for further investment.

When the company approached Wapda in Lahore for Matiltan project it was told that a tariff more than 3 cents per unit (1.3 cents per unit lower than offered by Wapda itself in the invitation) would not be acceptable.

Sources in the Board of Investment said that perhaps Wapda was unaware that Voith Siemens was the parent company of Synergics that already had LOS and LOI for Matiltan and Kohala projects respectively.

The company had protested that it spent $6 million on the completion of detailed engineering study of the Kohala power project but its contents were being given to other power companies by Wapda in violation of laws on intellectual property rights.