WAPDA to set up power plants

Islamabad: Federal government has allowed the state owned Water and Power Development Authority (WAPDA) to set up thermal power plants in the country.

The Economic Coordination Committee (ECC) of the Cabinet headed by caretaker Prime Minister Mohammedmian Soomro has already approved decision of allowing public sector to set up thermal power plants to meet the power shortages.

The decision will enable to add much required 2,450MW electricity in the system through public investment. The government has recently allowed Pakistan Electric Power Company (PEPCO) to set up thermal power plants to generate 2,450 MW.

Sources said that industry and business leaders in the country have also urged to introduce pubic-private thermal power generation programme that would lead to the enhancement of power generation.

Sources said that earlier the private sector was only allowed to set up thermal power generation plants that has been the major reason of the power shortage crisis in the country as the private sector has failed to increase the power generation. Sources said that 16 independent power producers (IPPs) are operational in the country and these plants were allowed setup in 1994. Since that time no new thermal power generation plant has been set up by the private sector to enhance the power generation.

Sources said that government is going to introduce public-private partnership programme for setting up thermal power generation in which public and private sector would go side by side to bridge the gap between supply and demand of power. Independent Power Producers (IPPs), in last government of Benazir Bhutto in 1994 heavily invested in power sector of Pakistan and generated enough power not only boom the industrial wheel of the country but also enabled the country to meet the residential and commercial consumers demand.

Later the governments, based on wrong calculations of the planning commission and ministry of finance of availability of surplus power in the country, banned the setting up of thermal power plants in the public sector.

The investigation carried out during 1997 to 2000 against the IPPs and the then political government on charges of commission and kickbacks in fixation of higher power tariff badly damaged the confidence of the investors who were planning to invest more in the country. Later, realising the fact that calculations about the availability of surplus power in the country are wrong, the interim setup started convincing local as well as foreign investors to set up new IPPs or expand the power generation capacity of existing plants.

The last government failed to convince the investors to set up new IPPs in time. No investment in new IPPs in the years 1999 to 2005 was done and it resulted into gap in the demand and supply of power.

These delays and no public investment in setting up of thermal power plants resulted in to load shedding when the economy of the country was to strengthen its earlier gains. The ongoing load shedding has not only disturbed the common man but also threatened the economy growth projections made in the Medium Term Development Framework.

Sources said that IPPs have been the major reason of the recent power shortages crisis because IPPs are bound to generate 5,728 MW power as per agreement with government but IPPs are violating the agreement regarding thermal power generation. During the power shortages crisis IPPs have been generating around 3,700 to 4,400 MW per day claiming that they were having the problems of maintenance. During the last year the power generation by IPPs stood at 5,500 MW per day that has dropped during the current season.

Sources said that the machinery of IPPs has been in very poor condition and due to old machinery these IPPs have failed to produce thermal power as per agreement with the government. A senior official in Finance Ministry said that during the former governments, commission mafia has been the main hurdl