LAHORE
KAPCO’s 660MW power project seems to be in doldrums, following the successful financial close of 3,720MW projects out of the 10,400MW early-harvest CPEC power projects.
The ministry of water and power sources told Pakistan Today that according to estimates, with the expected financial close of USD 6.6 billion power projects, there would be an expected surplus of electricity by fiscal 2019; this has put a question mark on KAPCO’s 660MW coal-based power project.
However, the sources said that owing to Sindh Engro Coal Mining Company’s (SECMC) commissioning in fiscal 2018-19, the 330MW mine-mouth power projects of HUBCO – Thal and Engro – would be soon materialised. Whereas, KAPCO’s construction period for the generation, has been estimated to end by December 2019.
The sources said that due to the hindrance in privatising KAPCO, the government wants investors to take a greater interest in key decisions related to the coal expansion project envisaged by KAPCO.
Besides, with the energy mix to shift towards lower cost coal – hydel and LNG – lower average tariffs are to potentially translate into higher margins for the industrial sectors.
The sources said that despite the swift work, coal projects entail a long gestation period. At best, they say, the project will start providing power to the grid by 2019.
Similarly, Chinese projects like the 1,320MW power project under process at Port Qasim, 1320MW Hubco projects at Hub, 600MW Lucky at Port Qasim and 660MW Engro power project in collaboration with Sindh government at Thar, would come, while KAPCO has operated at a 70 per cent capacity utilisation, up from the previous year.
KAPCO Chief Executive, Aftab Mahmood Butt, observed that during the third quarter, the power plant generated 1,927.7 gigawatt hours of electricity (year to date generation level at 4,802GWh) at a load factor of 66.7 per cent (year to date load factor being 54.5 per cent) and with an overall commercial availability of 97.1 per cent (year to date overall availability at 96 per cent).
The circular debt is a constant headache for the entire energy chain and for KAPCO, there is no exception.
The company CEO complained “The ‘off-taker’ continues to remain in default of its payment obligations. On March 31, the overdue receivables from the ‘off-taker’ were Rs 72.4 billion”. He asserted that the company was continuing to pursue the ‘off-taker’ and concerned ministries in the government for resolution of the matter.
KAPCO CEO also stated in the directors’ report that the ‘off-taker’ had raised liquidated damages invoices for the company’s failure to dispatch, due to fuel shortage, (as it raises with other Independent Power Plants) which is a consequence of the off-taker’s payment defaults.
