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Hubco's new tariff proposals returned as vague: Zulfiqar

ASHRAF KHAN

KARACHI: Wapda has sent back Hubco's new tariff proposal, calling it vague.

Zulfiqar Ali Khan, Chairman of Wapda, in reply to a question at a press conference here on Friday said that there was nothing comprehensive or concrete in the Hubco proposal. The proposal suggested various ways and steps, to be taken by Wapda and the government only. "We have sent back the proposal to Hubco for further clarifications", he said.

It was unfortunate, Zulfiqar said, that the power company was drawing strength from the US senators to get the government pressurised. "They have hired lobbyists in America" and were projecting a baseless view that Wapda did not want to resolve the issue through negotiations. The company was spreading wrong impressions about the issues in displute. For instance, he said, it was irrational on Hubco's part to demand a cut in fuel oil prices since it was a 'pass-through' item. "At whatever price it buys fuel oil from the PSO, it passes it on in its bills to Wapda."

There is also a big difference in the actual equity injected into the project and that used in calculating the IRR through tariff model, Zulfiqar said. But Hubco was denying Wapda and the government the right to verify the tariff and actual cost of the project, which is undisputedly 'subject to verification' and 'subject to audit', he said. "They have not even replied to the questionnaire of Fergusons, a private audit firm of international repute, which was sent to the company", Zulfiqar said.

"When we could settle our issues with other IPPs, why can we not with the National Power?" he said. "The sponsors of these IPPs are far bigger power generation houses than the National Power. Alpaso, the sponsor of an IPP, is many time larger than the National Power", he added.

"We have negotiated downward tariffs with as many as 12 IPPs", he said, which would bring about a relief of 1.8 billion dollars over these projects' life. Each cent of Hubco tariff carries far bigger financial implications over the project life of 30 years, he said. Despite being the largest power plant (1292 mw), no signs of 'economies scale' are visible, the Wapda chairman said. "When smaller IPPs can bring down their average levellised tariff to 4.5 cents why can Hubco not do that while it is far bigger in size and economics?"

The Wapda chairman said that negotiations were continuing with the two Karachi-based IPPs, Tapal and Gul Ahmed, and Wapda would reach a settlement with them soon.