Pakistan has regionally highest power tariffs which have consequently raised the cost of manufacturing. This has been one of the prime reasons for the loss of competitiveness of our industry and the stagnation of our exports.
The high tariffs hurt industrial production, commercial activities and even the common man as these tariffs are correlated to income levels of the ordinary Pakistani electricity consumers.
These rates are a direct result of corruption and inefficiency which have plagued the system.
This document deals with the main causes of the exorbitant tariffs allowed to IPP’s with complete disregard to the agreed rates of return as a result of corrupt practices.
The IPP’s under scrutiny fall in the following categories:
1. Coal Power Projects 2640 MW’s
This report only deals with the CPEC sponsored 2 x 1320 MW plants.
Section A of the Report
2. Oil & Gas based Thermal Plants 1200 MW’s
Only those under the 2002 policy
Section B of the Report
3. Wind Power Plants 1350 MW’s
Section C of the Report
Other IPP’s categories that also require to be scrutinized and revisited are:
4. Solar IPP’s: 4 projects 400 MW’s A Tariff of US cents 18/Kwh for the first 10 years, whereas, the internationally competitive tariffs currently are well under 4 cents and at the time of award of these projects was about 7 cents per kWh.
Section D of the report
5. Hydel IPP’s Approx 3000 MW’s underdevelopment (List attached)
Hydroelectric power used to be the cheapest source of electricity. It is no more as it is now costing 8 to 10 cents as opposed to 5 cents or even lower for solar and wind energy. Even hydroelectric power is not priced more than 4 cents in most jurisdictions in the world.
The rationale for scrutinizing the bidding for Dasu, a public sector project under World Bank, auspices reveals that bids were lower by 50% or even more compared to those for similar projects.
A comparison of different projects shows that unit costs vary widely. Karot has 2.03 times the reference cost for Dasu, Kohala 3.31 times, Azad Pattan 3.97 times, Suki Kinari 2.38 times and Mahl 2.50 times.
Attached is the PDF document regarding the overpayments of the IPPs.
COMBINE FILE OF OVERPAYMENTS-min_compressed (2)
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