40 mmcfd gas supply approved for 'khaas' power projects

[Naveed Yaseen]

MUSHTAQ GHUMMAN
ISLAMABAD (December 16 2008): The reconstituted Economic Co-ordination Committee (ECC) of the Cabinet in its first meeting on December 2, 2008, presided over by Advisor to Prime Minister on Finance Shaukat Tarin, had approved 40 mmcfd gas for two rental power projects, despite the fact that their credentials were doubtful, sources in PPIB told Business Recorder.

However, one project has not been given clear signal yet, as some ECC members were not satisfied with the documents provided by the PPIB through the Ministry of Water and Power, sources said. They said that both ' favoured projects' had been processed by the Private Power Infrastructure Board (PPIB) with extraordinary speed never seen before.

The 'efficiency' of the PPIB can be gauged from the fact that the company had written a letter to PPIB on August 19, 2008, showing interest in establishing a 'rental power' project which, supposedly, would start commercial operations by June 2009, premised on securing a three-year agreement with the purchaser, Pepco. The PPIB, showing its 'efficiency', forwarded the copy of the proposal to Petroleum and Natural Resources Secretary for allocation of gas, who in turn sent the summary to ECC for approval of gas for the project.

However, the ECC in September had also constituted a committee under the chairmanship of Minister for Water and Power (who is also chairman of the PPIB) with Secretaries of Petroleum, Water and Power and Chairman National Reconstruction Bureau (now Prime Minister's Advisor on Petroleum too) as members to look into prices of gas with different British Thermal Unit (BTU) values, and possibility of allocation of gas to some other IPPs for fast track power projects.

The committee recommended that (i) 20 mmcfd gas, from Zamzama, be allocated to Aiden Ventures (Pvt) Ltd for setting up a fast tract 100 mw rental power project at Nooriabad in Dadu district and firm commercial proposal be submitted for negotiations with Pepco as soon as possible; (ii) 20 mmcfd gas, from Zamzama, be allocated to First Tri-star Modaraba for setting up a 110 mw IPP at either Nawabshah, Site Karachi or in the vicinity of Madinatul Hikmat, Karachi, and all formalities be completed under fast track initiative with the PPIB. Earlier, the company had shown interest in setting up a rental power plant at Hawkes Bay in Karachi.

Sources said that when the issue came under consideration in the ECC , it was observed that during the period December-February, demand of gas increases manifold, and it would not be possible to make available 40 mmcfd gas to IPPs during this period.

However, it was suggested that the gas can be made available to IPPs for setting up fast track power projects, after March 2009. The ECC also decided that financial viability of the proposal of First Tri-star Modaraba for setting up 110 mw power plant be also examined by the Ministry of Water and Power.

Information about First Tri-star Modaraba is available on internet, according to which it was primarily engaged in the leasing of plant and machinery, commercial and private motor vehicles and computers; providing finance on Morabaha and Musharika arrangements; purchasing and sale of marketable securities and trading in various items.

However, when Business Recorder searched the site of the other company on the internet it was found that no such company was registered. When this scribe called the listed telephone for the company, no one attended the phone. This company was not even listed in the SECP's list of registered companies.

http://www.brecorder.com/index.php?id=852507