ISLAMABAD: In a major development, the Hubco Power Plant in Balochistan which operates at only one percent of its capacity throughout the year and the government owes Rs260 billion in capacity payments for the next seven years, has offered the federal government to buy it for Rs65 billion.
Tabish Gauhar, Special Assistant to the Prime Minister, confirmed to The News, saying: “Hubco Power Plant CEO Khalid Mansoor together with his legal team submitted a proposal offering the federal government to buy it for Rs65 billion.”
He said the power plants were nominally contributing to the national grid by running at a capacity of 1 percent per year. “All units are RFO based and the government pays a capacity payment. The government will have to pay Rs260 billion in capacity payments in the remaining period of the power purchase agreement until 2027 and given the situation, the proposal from Hubco management is worth considering. “
The Hub Power Plant is an RFO fueled thermal power station, located at Hubco in Balochistan. The plant was built in 1997 with a 30-year Power Purchase Agreement and supplies 1,200 MW (net) of electricity to the national grid. It employs four units; each has a gross capacity of 323 MW with a boiler, flow turbine and a designated generator.
Due to imported blends with the addition of coal and thermal power generation and combined cycle Re-Liquefied Natural Gas (RLNG) based, cheaper power is now available in the NTDC system. Power supply is also higher than demand, resulting in low RFO-fueled power generation deliveries. “Use of the Hubco plant has fallen to 1 percent per year.”
SAPM Gauhar said, “I have submitted a counter-proposal to the CEO of Hubco saying that the government will provide liquidity of Rs65 billion if he converts two of its units on Thar coal to produce 600 MW for Karachi and the rest is used to install a water desalination plant to provide 300 million gallons. water every day to Karachi. “
Gauhar said that Hubco has signed an MoU with K-Electric to supply 600 MW of electricity. This will be a win-win situation for both Hubco management and the Pakistani government. The government, which has to pay Rs260 billion in capacity payments in the next seven years, will be able to discharge its obligations by paying only Rs65 billion.
In response to a question, he said that the amount would be set from the Karachi package. “Karachi’s water needs reach 600 million gallons per day. With the proposal, Hubco will meet 50 percent of Karachi’s water needs. “
Gauhar said: “We want to set the price per gallon of water at 50 paisas and the government will also renegotiate to lower the Thar coal price to $ 25 per tonne from $ 50 per tonne. If that is done, the electricity costs from Thar coal will also go down. “
The Special Assistant to the Prime Minister of Electricity said that the Hubco power plant management team will now respond to the government for its proposed countermeasures next Monday after receiving input from the plant owner.