Rental power plant fails test run, eats up Rs225m

By Mohammad Saleem Friday, 25 Jun, 2010

FAISALABAD: A 150 megawatt rental power plant (RPP) installed in Samundri has consumed furnace oil worth Rs225 million provided by the government over the past year, but is yet to pass a reliability test run mandatory to join the national transmission system. Because of its old age, the plant manufactured by China in 1958 failed its first test conducted on June 4 by a Dutch engineer hired by the Asian Development Bank. The engineer gave another chance to the Techno E-Power, the company which had installed the plant, suggesting that it should replace old equipment to make it work. The plant failed another test on June 11. According to sources, the companys owner has sound contacts in the power corridors and it is not bound to return the amount spent on furnace oil by the government. The federal government signed a rental services contract with the company on Feb 14 last year and the 150MW plant was imported from China. The Northern Power Generation Company (NPGCL Genco-III), a state entity and buyer of electricity, bore the entire cost. The $135 million project was to supply power to the national grid for three years after passing the test. The government has pledged that it will provide furnace oil till termination of the contract and the company will pay Rs26,000 per ton of the oil. The government will also pay $45 million annual rent to the company. The NPGLC favoured the Techno E-Power by paying it $9.45 million (Rs687 million, or seven per cent of the total cost) in advance. The company was paid as much for the second time on April 1 last year as additional down payment. The sources said the government had also been paying instalments of a loan obtained from a consortium of banks for the project. The first quarterly instalment of Rs38.2 million was paid to the Askari Bank on Feb 23 last year, second instalment of Rs38.9 million on March 7 and the third instalment of Rs18 million on May 28. The Techno E-Power will return the amount to the government in instalments after the plant starts production. Genco-III is following instructions of the Pakistan Electric Power Company (Pepco) regarding payments to the company.

It is learnt that the company had promised to supply 60MW till June 20 and 150MW by July 30 last year. Over two dozen diesel engines were installed at the plant for speedy power generation. A source at Wapda House said Genco-III had also paid for a power connection for the company in Samundri. It paid Rs434,400 on Feb 14, 2009, as security deposit for the temporary connection and Rs468,000 to the Faisalabad Electric Supply Company (Fesco) on Sept 22 as electricity charges. It also paid Rs744,850 and Rs434,400 to Fesco on other occasions. The sources said engineers had made it clear to Nepra at a meeting a couple of months ago that the plant was outdated and would not work according to the schedule. Nobody is allowed to visit the plant and the sources said that former Fesco chief executive Ahmed Saeed had also been barred form entering the place. Several internal tests were also conducted to ascertain the plants capacity for power distribution, but it failed all of them. However, no action has been taken against the contractor company despite the failures. Techno officials refused to comment on the issue. Pepco Managing Director Tahir Basharat Cheema said efficiency of rental plants was not his organisations responsibility. He said the oil that had been provided was meant for test run and Pepco owed another Rs300 million worth of oil to the plant which was producing 60MW. He said the plant had been partially cleared by ADB experts.