Govt to take over K-Electric over refusal of PPA: ISLAMABAD: The Economic Coordination Committee (ECC) here on Wednesday made the federal government intent free from taking control of K-Electric if the utility business continues to avoid signing power acquisition agreement (PPA).
Regarding the power purchase contract with K-Electric, the cabinet member stated that after duplicated failing of Power Division to authorize arrangement with the power energy, the ECC made up a four member committee head by Money Priest Shaukat Tarin making up Preacher for Preparation and also Unique Initiatives Asad Umar, Minister or Industries and also Manufacturing Hammad Azhar as well as SAPM on Power Tabish Gauhar to convince K-Electric to authorize PPA (Power Purchase Agreement) for boosted power supply up to1,400 MW with the federal government.
It was made a decision if the K-Electric continues to evade signing the PPA, then the federal government will certainly not wait from taking over K-Electric control as a last option.
The federal government is providing to K-Electric 1,000 MW of electrical power (650 MW throughout Ramazan under the 2015 contract and also 350 MW a lot more without any contract). The K-Electric is securing free electrical power as well as marketing it to its customers, without repaying to the federal government.
The KE wants 1,400 MW each day, however has considering that long resisted to authorize the agreements with NTDC and CPPA.
The Power Department recommended to ECC to enable it to unhook the electrical power to K.E from May 30, 2021 if the latter doesn’t sign the arrangement.
Nonetheless, the ECC participants felt that in that situation the people of Karachi will endure as well as not the K-Electric.
So the ECC chose to provide one last chance to the power energy as well as constituted a high power pastoral panel to encourage the K-Electric to sign the PPA and also in case of failing, the government will certainly not be reluctant to taking control of K. Electric control.
Earlier on 19th June, 2020, the Cabinet Committee on Power (CCoE) approved additional supply of 1,300 MW from nationwide grid to K-Electric. The CCoE on August 27, 2020 routed “KE and NTDC to start transmission of additional 350-450 MW for peak summertime period from March 2021.
It additionally decided that KE, CPPA as well as NTDC will sign Power Acquisition Contract for extra power supply of 350-450 MW within one-week but it can not occur.
The K-Electric wishes additional capability be increased to 1,400 MW. Power Division supports the proposal of KE. The KE is drawing an added 350 MW from the national grid in addition to 650 MW to meet the rising demand throughout Ramazan.
The K-Electric had actually accepted be treated on the very same concepts as those related to the 10 ex-WAPDA Nightclubs. The KE additionally needs the payments to CPPA be adjusted against federal government’s subsidy but the Power Department opposes that.
The K-Electric consents to supply SBLC as a guarantee against settlement while the Power Department is insisting on SBLC backed by an ESCROW setup, besides various other technological matters every one of which have avoided the growing of the PPA.