KARACHI: KESC generation capacity ‘not to increase before 2011’
Monday, June 1, 2009
KARACHI, May 20: With public outrage at the KESC’s load-shedding in the city spilling onto the streets in many localities, and the provincial administration’s decision taking serious notice of continuing power outages, the utility’s Abaraj-led private management has now acknowledged that there is no possibility of increased generation capacity until the middle of 2011 or early 2012.
As a result, load-shedding will not end by the end of this year, as promised by Federal Minister for Water and Power Raja Pervaiz Ashraf. The management’s assurance to the Sindh governor, extended earlier, to improve generation within a week also stands nullified.
The utility has issued an official statement presenting a 560MW power project at the Bin Qasim Power Station, which was planned long ago, as a fresh initiative for improving generation capacity. Analysts say the move was made in an attempt to pacify public outrage and deflect government pressure on the issue of the power crisis.
On a day when the utility was facing a shortfall of about 400MW in meeting the demand for 2,200MW, the KESC management claimed it was “set to aggressively deliver on its commitment to improve electricity supply for the people of Karachi, by increasing its internal generation capacity with the addition of a 560MW power plant, obtained from GE”.
It said that a contract for a 560MW dual-fired combined-cycle plant at Bin Qasim was initially signed in June 2008. Following the new management’s takeover at the KESC, the price was “successfully re-negotiated”, bringing the original price down by $15 million.
The reduced package price of $378 million will produce power at $675 per MW, claimed the KESC management, adding that it makes the project “one of the most economical combined-cycle projects in Pakistan, compared to projects being constructed using the same technology and projected prices of $800 or more per MW”.
Interestingly, the project has also been cited in the 2008 annual report and quarterly report for July-September, Oct–Dec 2008 and Jan-March 2009 but there is no mention of any renegotiation of the deal as a result of which $15 million was saved by the utility. Insiders maintained the cost was brought down on certain conditions, but the management has not mentioned anything regarding such conditions.
The utility’s management claimed that keeping in mind the “need for dependable solutions for Karachi’s electricity grid, the KESC has selected the proven technology of GE’s 9E Frame Gas Turbines, manufactured in France, as well as including a Steam Turbine to provide a Combined Cycle Power Plant. M/s Harbin of China has been selected to perform Project Works and Plant Commissioning, with an advance payment of $56.6 million”.
Despite the passage of one year, however, work on the project has not yet begun, apparently because the management has not provided the contractors with the ‘mobilisation amount’.
The project is to be built under a fixed price formula, and will follow World Bank guidelines to ensure environmentally-friendly policies are followed.
The plant is to be completed in four phases, with the first gas turbine expected to be online within 24 months (May 2011), and the second and third gas turbines to be commissioned in June and July 2011 respectively. The steam turbine will be commissioned by January 2012, thereby achieving a total capacity of approximately 500MW connected to the 220kV network through GIS.
KESC CEO Naveed Ismail has said, “We are moving as quickly as possible to install additional power generation capacity to meet the critical needs of Karachi’s business and residential sectors. The KESC has selected GE technology because they have a proven track record in Pakistan and the technology can be installed very quickly. Furthermore, GE also has the manufacturing capacity to meet our needs for such a large number of engines in a very short period of time. We are confident that this project will go a long way towards helping KESC improve grid service to support economic growth in the city, which is of vital interest to the entire country.”
“The addition of this power project will take the KESC a step closer towards self reliance in power generation to meet Karachi’s long-term needs,” the utility’s CEO maintained, without mentioning the problems faced by people and the losses to business and industry.
Though he claimed that reducing load-shedding was an immediate priority, he added the KESC’s efforts are aimed at providing the best value for its shareholders’ and consumers’ money.
As a result, load-shedding will not end by the end of this year, as promised by Federal Minister for Water and Power Raja Pervaiz Ashraf. The management’s assurance to the Sindh governor, extended earlier, to improve generation within a week also stands nullified.
The utility has issued an official statement presenting a 560MW power project at the Bin Qasim Power Station, which was planned long ago, as a fresh initiative for improving generation capacity. Analysts say the move was made in an attempt to pacify public outrage and deflect government pressure on the issue of the power crisis.
On a day when the utility was facing a shortfall of about 400MW in meeting the demand for 2,200MW, the KESC management claimed it was “set to aggressively deliver on its commitment to improve electricity supply for the people of Karachi, by increasing its internal generation capacity with the addition of a 560MW power plant, obtained from GE”.
It said that a contract for a 560MW dual-fired combined-cycle plant at Bin Qasim was initially signed in June 2008. Following the new management’s takeover at the KESC, the price was “successfully re-negotiated”, bringing the original price down by $15 million.
The reduced package price of $378 million will produce power at $675 per MW, claimed the KESC management, adding that it makes the project “one of the most economical combined-cycle projects in Pakistan, compared to projects being constructed using the same technology and projected prices of $800 or more per MW”.
Interestingly, the project has also been cited in the 2008 annual report and quarterly report for July-September, Oct–Dec 2008 and Jan-March 2009 but there is no mention of any renegotiation of the deal as a result of which $15 million was saved by the utility. Insiders maintained the cost was brought down on certain conditions, but the management has not mentioned anything regarding such conditions.
The utility’s management claimed that keeping in mind the “need for dependable solutions for Karachi’s electricity grid, the KESC has selected the proven technology of GE’s 9E Frame Gas Turbines, manufactured in France, as well as including a Steam Turbine to provide a Combined Cycle Power Plant. M/s Harbin of China has been selected to perform Project Works and Plant Commissioning, with an advance payment of $56.6 million”.
Despite the passage of one year, however, work on the project has not yet begun, apparently because the management has not provided the contractors with the ‘mobilisation amount’.
The project is to be built under a fixed price formula, and will follow World Bank guidelines to ensure environmentally-friendly policies are followed.
The plant is to be completed in four phases, with the first gas turbine expected to be online within 24 months (May 2011), and the second and third gas turbines to be commissioned in June and July 2011 respectively. The steam turbine will be commissioned by January 2012, thereby achieving a total capacity of approximately 500MW connected to the 220kV network through GIS.
KESC CEO Naveed Ismail has said, “We are moving as quickly as possible to install additional power generation capacity to meet the critical needs of Karachi’s business and residential sectors. The KESC has selected GE technology because they have a proven track record in Pakistan and the technology can be installed very quickly. Furthermore, GE also has the manufacturing capacity to meet our needs for such a large number of engines in a very short period of time. We are confident that this project will go a long way towards helping KESC improve grid service to support economic growth in the city, which is of vital interest to the entire country.”
“The addition of this power project will take the KESC a step closer towards self reliance in power generation to meet Karachi’s long-term needs,” the utility’s CEO maintained, without mentioning the problems faced by people and the losses to business and industry.
Though he claimed that reducing load-shedding was an immediate priority, he added the KESC’s efforts are aimed at providing the best value for its shareholders’ and consumers’ money.
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