ISLAMABAD - Expressing grave concerns over the exceeding cost of Nandipur power plant, Nepra on Wednesday reserved its decision on the country’s one of the highest tariff requests.

During the public hearing MD Nandipur Muhammad Mehmood pleaded that due to corruption and delays the cost of the project increased. The authority asked Mehmood that in papers the cost of the project was $847 million but why he was claiming more capital. He further said that due to lying at port Qasim unattended and for a long time the efficiency of Nandipur power plant has been decreased.

Mehmood while talking to The Nation explained that the actual cost of the project was Rs23 billion when it was approved in 2008, but due to delays it shoot up to Rs57 billion. He vowed that project would be completed in Rs57 billion, the cost that was approved in 2013. He said $847 million was the cost projected in the initial model, when rupee value was 67 against one dollar. Northern Generation Company has applied for highest tariff on gas furnace oil and diesel. It has requested Rs.12.47 on gas, Rs 26 on furnace oil and Rs 41 on diesel. It is the first time that any power plant has applied for three alternate fuels simultaneously, and the applied tariff is also one of the highest in the history of the country. Northern Power Generation Company Limited (NPGCL) requested for two parts tariff structure namely energy charge and capacity charge. According to the documents submitted by NPGCL on reference conditions and 100 percent loading net efficiency on RFO/ HSD is 44 percent whereas on gas it is 48 percent. The project cost has been indicated as $847.016 million, with construction period exceeding 7 years. The debt equity ratio is 66:34  Nandipur Power Project, 425MW combined cycle thermal power plant located at Nandipur near Gujranwala, is being constructed by China Dong Fang Electric Corporation. Dong Fang has been blacklisted in Pakistan by Ministry of Railways and according to PPRA rules and declaration it cannot do any new business in the country. It has been alleged that Dong Fang gave high commissions and kick backs to government officials. Company delivered locomotives to Pakistan Railways but just after some months the Railways engines frames and foundations developed cracks and were grounded, many permanently. Stalled under the PPP government, and rusting the machinery at Port Qasim for almost five years, Nawaz government started the project on war-footing.

The plant was shut down just after the inauguration of its first phase by Prime Minister Nawaz Sharif in May this year. It was found that plant could only be run on alternative costly fuels and not on gas.

According to experts this plant was installed to run on gas with an average cost of Rs 7-8 per unit, but due to unavailability of the natural gas the plant was run on diesel and cost Rs 40-41 per unit.

It is pertinent to mention that Ministry of Water and Power has been repeatedly asking ministry of Petroleum to provide natural gas to run their power plants but Ministry of Petroleum has been denying due to limited resources.

Why Nepra, an independent regulator, accepted government application for three different tariffs and most expensive ones. Nepra spokesperson Safeer was not available to comment. Nepra has been working without any permanent chief, and it is alleged that the government is using the authority to approve favourable decisions. It is also alleged that Ogra is governed by the non-technical staff that have no previous experience of running an authority or in the fields of electricity. Minister of Water and Power Khawja Asif’s has recently admitted that Khawaja Naeem, former acting chairman and presently member is his brother-in-law, but he was not using him for getting favourable decisions. Khawja Asif has also admitted having shares in rental power plant but said he sold them.