Govt, SC may lock horns on RPPs issue

The government and Supreme Court of Pakistan might lock horns over another controversy regarding Rental Power Projects (RPPs), as the apex court is set to hear a related suo moto case today (Tuesday) while the Prime Minister is likely to give approval of advance payment to RPPs to the cabinet.

After finding no solution to end or reduce energy crisis growing with each passing day, the Power Ministry has sent a summary to the federal cabinet seeking hefty amount of Rs 2 billion for advance payments to only two 135-MW Rental Power Projects (RPPs) named as Kamonki Rental Power Project and Sialkot Rental Power Project, sources privy to the development revealed on Monday, adding that though the Finance Ministry has declined to provide this hefty amount for both RPPs, yet this is included in the agenda of upcoming special meeting of the federal cabinet likely to be held tomorrow (October 12). The federal cabinet would give go ahead to Water and Power Ministry to initiate these both RPPs to meet the energy crisis, the sources said.

However, on the other hand, a suo moto on the much debated RPPs will be taken today by the Supreme Court of Pakistan and it is likely that SC would stop the government to initiate another adventure which has already played with the over burdened general public bearing the brunt of such irrational decisions of Pakistani government.

It was also learnt that PEPCO has apparently assured the Water and Power Ministry to provide the advance payments for both RPPs. Sources were of the view that Power Ministry despite failing to give due payments and Furnace oil in time to the Independent Power Plants (IPPs) of the country till this effect, however, it is gearing up its serious efforts to get the final nod in this regard from the federal cabinet during next meeting of the cabinet focusing on energy crisis to be chaired by the Prime Minister Syed Yousuf Raza Gilani.

It is testimony of the fact that the federal cabinet on 21st September turned down this very summary seeking advance payments to both RPPs after finding no comments from the concerned ministries. Further, the generation capacity of Kamonki RPP is 65MW and Sialkot RPP is 65MW, which in total of both would be 135MW but it is ironic to learn that Lakhra Power Generation Company Limited (state-owned) could not provide Furnace oil to 232MW Karkey Rental Power Project that is operational from last seven months to meet the demand and supply gap of electricity caused long hours load shedding in the country. Additionally, Asian Development Bank in its report on RPPS has recommended review or to make an end to this very idea, sources said.

Rental power plants were set up to meet short-term and emergency requirements of the country. Rental periods are normally 5-7 years depending on the country’s need. Rental power plants have been set up in the US, UK, India, Bangladesh, Kuwait, Sri Lanka, Turkey, UAE, Saudi Arabia, Iraq, Palestine. The concept was introduced in Pakistan in 2007.

Economic pundits when contacted argued that rental power project may be a viable option to lessen electricity demand-supply gap over the short run, but there is a need to reconsider whether burdening the economy with makeshift (and palatial) thermal energy. They were of the view that RPPs had seemingly contributed disadvantages so far as oil bills had increase; gas reserves were depleting very fastly, and high tariffs while producing electricity from rental power plants. Only spending amount on rehabilitation of existing generators and promoting energy conservation can give out positive outcomes, they opined. “Now Pakistan People’s Party led coalition government has opted the option of using Rental Power Plants (RPPs) to overcome persistent electricity crisis that is not only causing great amount of hardships for the fellow citizens but also hitting hard to country’s economy, they said, adding, that In recent past there was much hue and cry from political and other circles over alleged kickbacks in deals of RPPs.

Pakistan Muslim League-Nawaz had already announced to issue a ‘White Paper’ on RPPs while another political party-Pakistan Muslim League (Q)- was also at the forefront in highlighting alleged wrongdoings in the execution of RPPs, they said.

According to them, it is incorrect to suggest that rental power costs are substantially higher than that of IPPs. Due to different tariff of rental plants, even after taking into account the high fuel costs, the cost difference is almost equal or marginally higher in case of RPPs. Compared with IPPs, RPPs power generation cost ranges between 12-13 cents per KWh, and IPPs’ power generation costs approximately 12 cent per KWh. But, the government circles are of the view that mere blame game is going on just for the sake of leg pulling. There is nothing wrong in RPPs and the only viable option to get rid of load shedding is rental power plants, they believe.

However, critics of RPPs are of the sanguine view that highly controversial RPPs had proved fruitless resort to overcome the power crisis, which has hit hard the economic growth of the country besides adding salt to public miseries at large. RPPs would not only fail to meet rising electricity demand but also add burden to the national exchequer in general and power consumers in particular. The public is justifiable in questioning that if RPPs are the option, why it is adopted too late? they questioned.

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