ISLAMABAD, Jan 29: Wapda has refused to buy coal from Lakhra Coal Mines Corporation (LCDC) for its 150-mw coal-fired project over pricing and other internal disputes, Wapda sources told Dawn.
Instead, Wapda has decided to invite open tenders from all coal suppliers to run its three plants of 50-mw each of the Lakhra Power Project (LPP), sources said.
Interestingly, Wapda owns 25 per cent shares in LCDC along with 25 per cent and 50 per cent shares of the government of Sindh and Pakistan Mineral Development Corporation (PMDC), respectively.
Sources said that board of directors, represented by Wapda, Sindh government and PMDC, decided early this month that Wapda should be supplied coal at Rs830 per ton inclusive of royalty etc. instead of existing around Rs700 per ton price which did not meet even the operation cost.
Wapda believed that the new price was not reasonable and decided to purchase coal through open tendering. Coal-based power generation cost at the LPP comes to around Rs2.83 per unit of which around 85 paisa per unit is the fuel (coal) cost.
Sources in the Sindh government said the Lakhra Power Project was inefficient and its three plants seldom operate simultaneously. They said the plant gave maximum production of 80-mw against installed capacity of 150-mw.
Average coal consumption at the LPP is in the region of 1,000 to 1,200 ton per day depending on power generation of 70 to 80-mw.
The Sindh government sources said that coal prices prevailing in different areas of the country hovered around Rs1,200 to Rs1,500 per ton in the recent days. Wapda has to pay around Rs50 million dues to the LCDC for coal supplies.
Wapda would not be able to get a price lower than Rs830 offered by the LCDC because of two reasons. Firstly, most of the coal owners were already tied up with cement plants and secondly, the market price was much higher than the LCDC, they said.
These sources said the LCDC had become profitable in the recent months in overall terms, but its coal supply was being subsidized by other heads which prompted the LCDC board of directors that this head should be made self-reliant.
Wapda has already selected Lakhra Power Project for privatization. The Privatisation Ministry had opposed the sale of LPP as stand alone entity and had solicited its sale as part of Jamshoro Thermal Power Project. The move was, however, rejected by the Chief Executive on strong resistance from Wapda.
Subsequently, the federal government has authorised the Sindh Privatization Commission to take steps for its sale. A coordination committee, led by Sindh Finance Minister Hafeez Shaikh, has been asked to oversee the restructuring of LPP.
