Determination of power tariff: Nepra asked to dispose of pending cases

September 6, 2012

Prime Minister Raja Pervez Ashraf has asked the National Electric Power Regulatory Authority (Nepra) to finalise fresh applications for determination of power tariff within 60 days and dispose of all pending cases within 45 days. Sources said the Board of Investment (BOI), during a presentation to the Prime Minister, stated the Nepra was taking too much time in tariff determination.

A senior official of BoI reportedly said that M/s ALT Private Limited of China submitted a tariff petition to Nepra on September 22, which is still under process. The Chinese company wanted to construct Korat Hydro Power Project that would generate 720MW of electricity.

Raja Pervez Ashraf asked the BoI to formulate a policy and suggest a suitable structure and mechanism with a view to successfully persuading investors to invest in Pakistan. “We need to comfort the foreign investor and ensure that timelines are met. The country needs to add to the existing generation capacity and therefore, we must provide every incentive to potential investors to reduce the gap between supply and demand,” he said, adding that there was a need to simplify and make policies to attract foreign investment to the power sector.

According to him, the determination of an upfront tariff by Nepra can play a critical role in facilitating foreign direct investment in this sector. The Prime Minister stated that, in case, Nepra needed additional technical expertise for speedy determination of tariff it could even hire foreign experts. The role of regulator should be to encourage investment, he added.

The Prime Minister said that Nepra needed to do some in-depth analysis and come up with recommendations encompassing legal, structural and administrative areas so that the present difficulties being faced by investors in getting a reasonable tariff could be resolved.

He directed Chairman Nepra to determine an upfront tariff for power sector projects in Balochistan on a priority basis and appreciated the regulator for determining upfront tariff for wind power projects. He expressed the confidence that Nepra would determine upfront tariff for solar, hydel and coal projects as well. The Secretary Board of Investment, Anjum Rasheed, during the briefing, apprised the Prime Minister that due to the efforts of BoI, foreign investors were now ready to make investment in various sectors, including power, petroleum, automobiles, gas and construction.

About LNG Terminal, the BoI informed the Prime Minister that Ministry of Petroleum and Natural Resources was in the process of floating the tender. The BoI also briefed the Prime Minister about the mega project of Centaurus in Islamabad, saying that the project was nearing completion and the Capital Development Authority (CDA) had made payment and demarcated land for a grid station and arrangements for provision of gas were also in the process.

Regarding the Mahl Hydropower project of 59 MW, the Prime Minister was informed that Private Power Infrastructure Board (PPIB) would consider the approval of the project in the next Board meeting. The Prime Minister was also informed that the BoI was presently negotiating with investors of Suki Kinari Hydropower project, Karot Hydropower project and Patrind Hydropower project. The Prime Minister was told that South Korean investors had already started work on Patrind Hydropower Project whose financial closure was expected by December 2012 while the project itself would be completed in December 2017.

The meeting was attended Dr Abdul Hafeez Shaikh, Minister for Finance, Mir Changez Khan Jamli, Minister for Science and Technology, Chaudhry Ahmed Mukhtar, Minister for Water and Power, Dr Asim Hussain, Advisor on Petroleum, Abbas Khan Afridi, MOS for Commerce, Dr Nadeem-ul-Haq, Deputy Chairman Planning Commission, Senator Syeda Sughra Imam, Secretaries, Cabinet, Finance, EAD, Information, Chairman CDA, Chairman NEPRA, Chairman WAPDA, MD PPIB and other senior government officials.