ISLAMABAD: The Senate Standing Committee on Power Friday questioned payment of Rs57 billion made to the Korea Electric Power Corporation (KEPCO) and extension of its contract to October, 2022.
The Senate Standing Committee on Power met here Friday with Senator Saifullah Abro in the chair and discussed grant of extension to KEPCO up to October, 2022. KEPCO is one of the major Korean companies with around $3 billion proposed investment in the power sector in Pakistan.
M/s Korea South East Power Company (KOEN) (Pvt) Ltd-Pakistan is the owner and developer of a 215MW Asrit-Kedam Hydropower Project and a 238MW Kalam-Asrit Hydropower Project having a total investment of about $1.0 billion in Swat.
Similarly, the Korea Hydro and Nuclear Power Co (KHNP) is the owner and developer of a 496MW Lower Spatgah Hydropower Project and a 350MW Athmuqam Hydropower Project with a total investment of $2.0 billion.
These state-owned KOEN and KHNP companies are subsidiaries of KEPCO. They had started investment in Pakistan in 2013 and successfully delivered the 102MW Gulpur Hydropower Project which began its operations in 2020.
KOEN had signed an MoU with the Khyber Pakhtunkhwa government in May, 2017, to develop a 215MW Asrit-Kedam Hydropower Project and LoI for a Kalam Asrit Hydropower Project issued in April, 2018. In contrast, the LoI for Asrit- Kedam Hydropower Project was published in June, 2021.
Senate body head Senator Saifullah Abro asked: “In what capacity extension to KEPCO was granted, and why have the transactions not been blocked on the expiry of its tenure?” National Electric Power Regulatory Authority (NEPRA) officials said that a payment of Rs57 billion had been made to KEPCO on the selling units at Rs19.5/unit along with the variable payment; however, no capacity payment was made after the expiry of its tenure.
They briefed the committee that regular correspondences had been made with NEPRA from July 2021 till January 2022 on the issue. The committee chairman inquired why NEPRA was not taking any action against the illegitimate extension to KEPCO and why not a petition had yet been filed.
The NEPRA officials said several correspondences had been made in this regard. The chairman inquired about the total transaction made to KEPCO after the expiry of its tenure, to which the committee was informed that Rs57 billion had been paid to KEPCO on the selling units at a cost of Rs19.5/unit, along with the variable payment, however, no capacity payment was made.
They informed the committee that KEPCO had been made minimal payment with strict tariff rules on the take-and-pay method. Senate body members also raised questions on the petition’s status before NEPRA to revise the tariff of GENCO-I. The NEPRA authorities said that it is not the mandate of the authority.
The committee members expressed their dissatisfaction over answers by the NEPRA authorities. The committee observed that the electricity problems could not be resolved unless the power division stopped working in a shoddy manner.
The committee also intended to receive a briefing by the power division secretary and the authorities concerned on the status of all the pending recommendations made by the committee in its meetings held during the period from June 24, 2021, till Feb 14, 2022 along with issues regarding rehabilitation plan of de-licenced public sector power generation plants of GENCO-I and a petition pending on revision of Genco-1 tariff.
