Bhikki Power Plant officials grilled at NEPRA hearing

LAHORE - - It was a tough day for the Qauid-i-Azam Thermal Power Limited QATPL, the Punjab government's much touted public private partnership arm for the energy sector, which faced myriad of questions at the National Electric Power Regulatory Authority's NEPRA hearing on the generation tariff petition for RLNG based 1180 MW Bhikki Power Plant.

QATPL team was led by CEO Ahad Cheema and included Chairman QATPL Board Arif Saeed . Chairman NEPRA Tariq Soddazi at the outset asked why QATPL was demanding $25.5 million in extra cost other than the Engineering Procurement and Construction EPC cost of $ 564.7 million . He wanted bifurcation of details.

The QATPL representatives replied that the extra cost was sought due to $6 million for maintaining spare parts, $4.2 million for buffer vessel, which they termed was essential to maintain plants output in fuel outages, and $ 9 million for staff colony. QATPL gave its non EPC cost at $90.7 million . Out of which $15 million for engineering consultancy services, $18 million for administrative expense during construction, O and M train $6 million , $13.6 million for gas pipeline and $12.5 million for security surveillance.

The Chairman NEPRA pointed out that consultants, NESPAK and Lehmar, and contractor will be doing all the major jobs during the construction. What was the need for a massive administrative expense? He specially asked the responsibilities of the Chief Strategy Officer. However, he was informed the seat was vacant like many others. He then asked why funds for training were sought when there was no technical staff.

QATPL officials also made another interesting claim as they said that some of the funds will be utilized for media blitzkrieg during the construction and completion of project like K-Electric . However, when asked by NEPRA whether they have seen any power generation company advertising on the media, QATPL had no answer. They were informed QATPL was a generation company while K-Electric was a power distribution company that has consumers.

QATPL officials made a shocking disclosure that 459 security officials were hired for round the clock security at the project site. They said some commandos were also hired to protect the movement of Chinese from Lahore to Sheikhupura. Chairman NEPRA said that they were asking for a battalion for protection, even though it was a project of the Punjab government and it should have provided the required security.

Interestingly, QATPL said that even though they have done the international competitive bidding ICB for the project at 61.1 percent efficiency but they want to have benchmark efficiency of 60.5 percent for the project. However this argument was opposed by the Central Power Purchasing Agency CPPA representatives who said it was not justified. As ICB was done on 61.1 percent efficiency it should be adopted otherwise the plant may give lower efficiency at the commercial operation date. This will cause financial burden on the consumers.

They also opposed gas pipeline cost as they said SNGPL was bound to provide pipeline as it was recovering gas infrastructure development cess GIDC. Like Private Power and Infrastructure Board representatives they also opposed extra EPC cost. Member Energy Planning Commission Syed Akhtar Ali pointed out that NTDC was calculating libour plus one on its loans and QATPL was presenting libour plus 3. It should be studied to determine a fair rate.