960402

Kot Addu sold to

National Power, UK

for $1.583bn

RECORDER REPORT

ISLAMABAD: The sale of Kot Addu Thermal Power Station has been approved by the Cabinet Committee on Privatistaion (CCoP) to the National Power of United Kingdom.

National Power at the final open bidding for Kot Addu plant last week had evaluated the unit at $1.583 billion. Two other bids were of $1.380 billion and $1.355 billion.

Chairman of Privatisation Commission, Naveed Qamar, while briefing the newsmen here on Tuesday said that the three top bidders had submitted their unconditional bids while the fourth one had made its evaluation at $1.119 billion with a number of conditionalities for the power station. However, the National Power made the top bid without any condition, therefore, the Privatisation Commission and the CCoP had no reason to consider other bids.

He said that even the unsuccessful contenders have appreciated the transparent privatisation process of the unit.

He said that we have got a very good value of the plant and the amount of $1.583 billion makes Rs. 53 billion. The price of the plant as assessed by the National Power at $1.583 billion translates the value of 26 percent of the plant at $215 million that is to be off loaded in the first phase of its privatisation.

He said the total valuation of $1.583 billion, an amount of $756 million is loan component while the rest $827 million is equity share. The price of the 26 percent shares amounts to $215 million while the remaining 74 percent shares will remain with Wapda.

Naveed Qamar said the letter of acceptance will be issued to the National Power on Wednesday, who will have to make the financial close of the project within 60 days of the issuance of the LOA.

He said the tariff of the project would be slightly below the power purchase agreement of the upcoming power plants as envisaged in the energy policy and it would be around cents 5.72 per units.

Answering a question, he said at present the price of Kot Addu is about Rs. 1.92 per unit and it would go upto Rs. 1.96 (5.72 cents) per unit.

Replying to another question, he said that the total of 215 million dollars, price of the 26 percent shares, would be paid to the government in lump sum within 60 days and there would be no instalments.

Responding to another question, Naveed said there is no compulsion on the government to sell more shares within any stipulated period, but the government may offer another 10 percent shares to the new management. However, he said, we have started simultaneous process for the floatation of 10 percent shares at the stock exchange. He did not specify any date for floatation.

He said the management of the project would be given to the new buyer for 25 years as prescribed by the power purchase agreement in the national energy policy.

When asked about the privatisation of the Faisalabad Area Electricity Board (FAEB) and Jamshoro Power Station, he said that the sale of Kot Addu plant has given a big boost to the privatisation of other power units of Wapda and we hope that the price of other units would also be encouraging.

Asked about the agreement with the employees, he said that there would be no deviation from the earlier signed agreement and they would be given 35 percent increase in basic salaries and about 50 percent increase in allowances besides all incentives being enjoyed by 900 employees at the moment. Their services would continue as before and they would be given golden hand-shake if so demanded by them.

Kot Addu power station has 15 turbines with a capacity of 1600 MW while the dependable capacity of the plant at the moment is 1260 MW.

Answering another question, he said that at the handing over of the project to the new buyer, final test of 1260 MW would be done in the presence of the new buyers, employees of the project and the evaluator of the plant. The tariff of the plant would come down further if the capacity of the plant exceeds 1260 MW.