ISLAMABAD - The Senate Standing Committee on Power has Friday asked the at what capacity an agreement extension to Kot Addu Power Company Limited (KAPCO) was granted and why the transactions have not been blocked on the expiry of its tenure.

Senate Standing Committee on Power, which met under the chairmanship of Senator Saifullah Abro, discussed matter pertaining to permission given for extension of KAPCO contract up to October, 2022. The chairman committee inquired that why NEPRA is not taking any action against the illegitimate contract extension of KAPCO and why not a petition has yet been filed.

Kot Addu Power Company Limited (KAPCO) is located in district Muzaffargarh, Punjab. Initially KAPCO was a public-sector power project; however, through its strategic sale it was converted into IPP through privatisation. KAPCO was commissioned in 1996 and its power purchase agreement (PPA), which runs a multi-fuel–powered plant of 1,638 megawatts, was valid for 25 years. On the expiry of agreement, the National Electric Power Regulatory Authority (Nepra) had provisionally allowed KAPCO to keep producing and supplying electricity to the national grid.

The vice chairman NEPRA informed the committee that several correspondences have been made regarding the issue. The chairman Committee inquired about the total transaction made to KAPCO after the expiry of its tenure to which the committee was informed that a total payment of Rs 57b is made to KAPCO on the selling units at a cost of Rs 19.5/unit, along with the variable payment however no capacity payment was made. NEPRA informed that KAPCO has been made minimal payments with strict tariff rules on take-on-pay method and no capacity payment.

Question was also raised on the status of petition before NEPRA for revision of Tariff of GENCO-I. The NEPRA authorities informed that it is not the mandate of NEPRA. The committee members showed dissatisfaction by the broken, indefinite and unsure answers by the NEPRA authorities. The committee observed that the electricity problems in the country cannot be resolved if the Power Division will continue to work in such a delayed and non-serious manner.

The committee also intended to take briefing by the Secretary, Power Division and all concerned on the implementation status of all the pending recommendations made by the committee in its meeting held during the period from 24th June to 2021 till 14 February along with issues regarding rehabilitation plan of de-licensed public sector power generation plants of GENCO-I and petition pending on the revision of Tariff of Genco-1. The agenda of the meeting also included the Bill Titled “The Regulation of Generation, Transmission and Distribution of Electric Power (Amendment) Bill, 2021” and other issues of public importance. The committee regretted the absence of the Ministry because of which the meeting could not be preceded. The chairman Committee informed that the Secretary Ministry requested for appearance in the meeting with a delay of one hour. The committee members waited for the appearance of the secretary for one hour but the secretary didn’t show up. The meeting was dismissed.

The meeting was attended by Senator Fida Muhammad, Senator Saifullah Khan Nyazee, Senator Sana Jamali and Senator Bahramand Khan Tangi.