20000124

Rousch Power begins commercial operation

ASHRAF KHAN

KARACHI: Another 412 mw independent power project (IPP), Rousch (Pakistan) Power Ltd. has started commercial operation and two more private plants are about to come into operation, within a week or two, it is learnt.

Rousch Power is among those IPPs which have re-negotiated and revised their agreement terms, including the crucial tariff issue, with the government of Pakistan.

"Yes, we have met all the requirements of commercial operation deadline (COD) of Wapda on December 11, by conducting reliability run tests (RRT) successfully", an official of the Rousch told Business Recorder. Now Wapda is buying Rousch power, on commercial basis.

Two years old quarrel between the IPPs and the government has delayed commercial operation of many of the IPPs. Rousch Power lagged about 18 months behind its schedule. But successive signing of agreements afresh has enabled them to start their commercial operations.

In 1998, both Wapda and Private Power and Infrastructure Board (PPIB) had declined to issue revised COD to the Rousch sponsors, sources said. Recently, the sponsors reached an agreement with the authorities entailing a cut in its levellised power tariff to 5.1 cents from 5.6 cents.

The estimated capital cost of the project is around 500.70 million dollars including equity of 137 million dollars. The major loaning facility, amounting to 140 million dollars, came to the project through the NDFC/World Bank's Public Sector Energy Development Fund (PSEDF). It included Euro Currency loan of 137 million dollars, HERMES 33 million dollars and DEM facility of 13 million dollars. A standby facility of 40 million from NDFC is also a component of the project total facility.

Sources further said that the 157 MW Fauji Kabirwala and 107 MW Japan Power are in the final stages of their RRTs. As soon as their RRTs are accepted by Wapda, they would start functioning on commercial basis.

Rousch is the seventh IPP which has started supplying to the national grid system.

Wapda, has negotiated with about 10 IPPs to bring their power tariffs downward. But agreements are subject to the approval of the IPP's respective lenders.

Sources, however, said that the size of tariff reduction would not bring the much desired financial relief to Wapda or the national economy.