ISLAMABAD: The National Elect­ric Power Regulatory Authority (Nepra) on Tuesday showed reluctance to allow about Rs32 per unit generation tariff for the 660-megawatt Jamshoro coal-based power plant as inordinate delays escalated its cost despite payment of loan commitment charges to the Asian Development Bank for years.

“Who will pay such a high tariff?” questioned Nepra Chairman Tauseef H. Farooqui who presided over a public hearing on the issue. He said the regulator also had to protect the interests of the consumers and hence could not allow such a high tariff.

The government had secured loans for the project more than a decade ago for the conversion of its old and inefficient oil-based generation units to coal but physical progress could begin only recently.

The hearing was informed that the federal government had now released Rs9bn as equity to kick off work on the stalled project and local banks had declined to extend Rs10bn due to reluctance of the federal government to release money against its equity.

It was reported that Pakistan had been paying commitment charges to the foreign lender for years as the work had been stalled for want of local funding.

The ADB had committed financing for the Jamshoro coal-based power project but the equity was not being arranged from the government side. Planning Commission representatives said Rs9bn funds had been released as project equity. They also confirmed that the loan money could not be utilised due to delays in the determination of generation tariff and equity funding but commitment charges had to be paid under the loan agreement.

It was reported that Jamshoro Power Company Ltd (JPCL) had sought about Rs27 per unit generation tariff in January which had now been revised to Rs32 per unit. The hearing was also informed that markup on the commercial financing would also be passed on to the consumers in tariff.

The project authorities in the petition claimed the main objective of the project was to add capacity with highly efficient and environmentally friendly technology resulting in the redressal of adverse fuel mix and reduction in the cost of power supply, thereby reducing the bulk tariff and circular debt.

The site is already owned by the project company while another 100 acres have to be purchased for an ash pond. The engineering, procurement and construction (EPC) contract for the main project was signed on March 29, 2018 for completion in 60 months and contractual commercial operations were due on Dec 27, 2021. The tentative commercial operations are expected to start from Nov 30.

Published in Dawn, May 17th, 2023