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ECC likely to approve additional supply of 150MW to KE

ECC likely to approve additional supply of 150MW to KE

ISLAMABAD: The government is expected to approve on Wednesday a plan for procurement of about 6.9 million tonnes of wheat in the public sector during 2019-20 and allow the sale of additional 150MW cheaper electricity from the national grid to K-Electric without settlement of old liabilities.

A meeting of the Economic Coordination Committee (ECC) of the Cabinet has been called on Wednesday to also formally approve Rs3 per unit subsidy announced by the prime minister for the industrial sector. Finance and Revenue Adviser Dr Abdul Hafeez Shaikh will preside over the meeting.

An official said the KE was faced with substantial (500-600MW) shortfall in peak summer months and had been pursuing the federal government for additional supply from the national grid including from Karachi-based nuclear power plants to meet peak demand and minimise public sufferings. It has been trying to secure about 500MW from the national grid in view of its inability to overcome capacity constraints on its own.

The Power Division has now moved a summary to the ECC in view of sufficient surplus capacity in the national network.

After a series of meetings with Central Power Purchasing Agency (CPPA), KE, National Transmission and Despatch Company (NTDC) and National Power Control Centre (NPCC), the Power Division has reported technical feasibility of 150MW additional power to KE from three wind power plants.

It was reported that 132kV existing transmission line could evacuate 150MW from three wind power plants in Gharo area namely Dawood Hydro China, Zephyr and Tenaga (50MW each) to KE.

A fresh power purchase agreement (PPA) for two years would be signed by KE with CPPA/NTDC after formal approval from the ECC of the cabinet. The PPA would be extendable. The average basket price of NTDC would apply to the sale of additional power supply to KE.

The government has not yet issued national security certificate for the transfer of KE’s 66pc share to Shanghai Electric of China because of over Rs100bn claims of Sui Southern Gas Company and NTDC/CPPA against the KE while the Karachi-based private utility also had huge claims against various entities of Sindh government. As a result, Shanghai’s $1.77 billion takeover plan of the KE continued to face roadblocks.

Informed sources said the ECC would also formally approve Rs3 per unit subsidy in power tariff to industrial consumers approved by former prime minister Nawaz Sharif. They said the industrial consumers had been enjoying the cheaper rates but the Finance Division had been reluctant to disburse these funds to power companies because initial allocations lapsed almost a year ago. The Power Division has now moved a summary for allocation of funds in the budget with the consent of the finance division.

The sources said the government would also approve wheat procurement plan for current crops to facilitate farmers now in harvesting phase. An official said the entire procurement of 6.9 million tonnes would cost about Rs250bn. Of this, the federal government would provide about Rs40bn to Pakistan Agricultural Services and Storage Corporation (Passco) for procurement of 1.1m federal share of the procurement plan. The remaining 5.8m tonnes would be procured by the provincial governments from their own resources.

The ECC is also expected to approve a Rs1.8bn additional subsidy to Tribal Electric Supply Company (Tesco) as cost of uninterrupted supply to domestic consumers and overall load management plan for the people of tribal districts of Khyber Pakhtunkhwa during Ramazan.

Supplementary grants

In addition, the ECC would approve about 10 supplementary grants mostly to law enforcement agencies and anti-narcotics force. These include about Rs75m worth of four technical supplementary grants for anti-narcotics force (ANF). Another major supplementary grant would be placed before the ECC by the Cabinet Division to meet the shortfall in pays, allowances and remunerations of the federal ministers, advisers and special assistants and so on for 2018-19.

Another supplementary grant for payment of court fee would be approved in case of Dr Hilal Hussain Al-Tuwairai and Al-Ittefaq Steel Products Company Ltd versus the Islamic Republic of Pakistan.

Published in Dawn, May 15th, 2019

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