By Farrukh Saleem
‘The Heart of Pakistan’ is without power 12 hours a day. The city of gardens survives without power half of the time. And, the capital of Pakistan’s breadbasket has electricity but only 12 hours a day. Alas, the Heart of Pakistan, a proud heart managing to survive, is in the house of mourning!
Lahore has Japan Power and Japan Power has 24 oil fired, residual furnace oil (RFO) diesel engines; a net dependable capacity of 120 MW. Lahore also has Southern Electric Power Project and the Southern Electric has six RFO diesel engines for a net dependable capacity of 120 MW.
Japan Power and Southern Electric put together have a capacity of 240 MW enough to make a major dent in Lahore’s power shortage. Alas, Japan Power is shut down! Alas, Southern Electric is shut down!
How much would it cost to put Japan Power and the Southern Electric back into supplying power to the Heart of Pakistan?
As per current energy and capacity invoices submitted to Wapda, annual fuel payment to both Japan Power and Southern Electric shall be in the amount of $223 million.
In addition to the annual fuel payment, Japan Power and Southern Electric would have to be paid an annual capacity payment of $42 million.
The two payments -fuel plus capacity- put together amount to $265 million a year — the price for pumping blood into Pakistan’s heart.
Dump Japan Power. Forget Southern Electric. Welcome rental power — welcoming little fishes in with gently smiling jaws.
Annual fuel payments to a rental power plant with a capacity equivalent to Japan plus Southern shall amount to $252 million.
Annual capacity payments to a rental power plant with a capacity equivalent to Japan plus Southern shall amount to $94 million.
The two payments -fuel plus capacity- put together shall amount to $346 million a year, every year for the following five years (figures used in arriving at annual payments are from Nepra’s website: http://www.nepra.org.pk/index.htm.
Japan plus Southern will cost $265 million a year while an equivalent rental power project shall cost $346 million a year — a difference of $81 million a year, $6.75 million a month.
Japan plus Southern will cost Rs22 billion a year while an equivalent rental power project shall cost Rs28 billion a year-a difference of Rs6 billion a year, Rs500 million a month, every month for the following 60 months.
But, putting Japan and Southern back to pumping blood into Lahore is a lot of trouble and forgetting trouble is the best way to cure it.’ (The article first appeared in The News Intl).
Also read: Did Iqbal Z Ahmed lie on Bolta Pakistan? by Irshad Salim
http://pkonweb.com/2009/07/30/iqbal-z-ahmed/
If my understanding is correct, purchasing fuel for these rental plants is government’s responsibility. And keep in mind those “capacity payments” to a rental power plant are to be paid even if they stop functioning for whatever reason — be it the failure of NEPRA to acquire fuel for them (as they usually will fail for not having the cash to do so) or these power plants break down (which they probably will since they are old, discarded plants bought by Mr Iqbal Z Ahmed).
Another point about the fuel: If the deal is anything like with KESC — and it probably is — NEPRA will be responsible for purchasing fuel for which these power plants can take 90 days to pay back NEPRA, leaving NEPRA short of cash (which it already is). What we will see is a repeat of KESC and “circular-credit” mess…