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Govt-Uch Power fail to reach accord

Rouch Power revises tariff downward

TAHIR DHINDSA

ISLAMABAD: The government on Friday failed to work out a new Power Purchase Agreement (PPA) with 586 megawatt Uch Power Company, whereas a memorandum of understanding (MOU) with 412 megawatt Rouch Power Limited with a downward revised tariff of 5.18 cent per kilowatt-hour was signed.

Sources told Business Recorder that Uch power could not agree on 5.1 cent per kilowatt-hour as revised tariff, which Wapda was demanding.

Two-member committee headed by Finance Minister with Chairman Wapda as member had been negotiating with Rouch power and Uch for the last 15 days to work out a revised PPA. The issue was discussed in the meeting of the Private Power Infrastructure Board (PPIB) on Thursday in presence of the Chairman Wapda, who later briefed Finance Minister on the development.

The two-member committee followed same terms of references, which formed basis of agreement with ten other IPPs. Wapda is now making capacity payment to all ten IPPs regularly.

With the standard terms of references agreed between Wapda and IPPs the two main issues left to be negotiated were reduction in tariff and rollover of up-front debt. With the resolution of tariff issue Wapda and the IPPs now would jointly go to the international lenders for rollover of the debt.

Chairman Wapda talking on the occasion said the revision in tariff with Rouch will save US$ 230 million over the life of the project. He said so far the tariff issue with eleven IPPs have been resolved and the new revised PPAs will save more than US$ 1 billion to Government over the life of the projects.