Latest news with #PortQasim
Express Tribune
10-06-2025
- Business
- Express Tribune
Excess power capacity
Listen to article Pakistan's power sector is mired in a tragic paradox, with citizens enduring relentless load-shedding and unaffordable bills. The nation pays Rs2.5 to Rs2.8 trillion annually to power plants that don't generate a single unit of electricity. This astronomical sum — equivalent to roughly 3% of GDP — epitomises a system where financial engineering trumps public interest, burdening consumers with costs for "capacity" that remains perpetually idle. The roots of this scandal lie in flawed power purchase agreements (PPAs) signed with independent power producers (IPPs). These contracts guarantee fixed "capacity payments" regardless of actual electricity generation, transferring all operational and market risks to the public. As Pakistan's installed capacity grew to over 46,000 MW — driven significantly by over 2,800 MW added through net metering — the utilisation of existing plants plummeted. Thermal power, though still dominant at 55.7% of the mix, remains underused in the winter due to transmission constraints and seasonal demand fluctuations — winter demand is about 12,000 MW, compared to summer demand of about 30,000 MW. Substandard transmission lines have been blamed for the failure to bring several new cost-effective plants online, notably Port Qasim, China Power and Lucky Electric. Instead, the government continues to rely on older, less efficient plants, resulting in a double whammy of unnecessary capacity payments and increased pollution. Capacity payments accounted for about 71% of the power purchase price last year and are projected to rise by one-third this year. The guaranteed payments are also a sorry example of 'socialism for the rich and capitalism for the poor', which is at the core of most of Pakistan's economic failings. Annual capacity payments exceed Pakistan's healthcare budget sixfold, and IPPs often inflate costs without fear of reprisal due to the sweetheart deals they were granted by every government over the past three decades. Meanwhile, millions of citizens are struggling to pay their inflated power bills. While some PPAs have been terminated, the government still has much work to do to rectify the situation, including grid modernisation and continuing to encourage a shift to renewables and locally-sourced fuels. It is also worth noting that in most countries, revenue from capacity payments is reinvested into infrastructure and other efficiency improvements instead of being rerouted to shareholders. Here, IPPs and distributors both have the gall to demand government intervention to improve infrastructure for which they are already receiving 'free money'. An egregious recent example saw one distributor, in response to criticism of its loadshedding policy, actually suggest that the government take over loss-making feeders while letting it reap all the profits. That such a suggestion could seriously be made is in itself a reflection of the power imbalance in the power sector.
Bloomberg
25-05-2025
- Business
- Bloomberg
Pakistan Allocates 2,000-MW Capacity to Power Bitcoin Mining
Pakistan has allocated 2,000 megawatts of electricity in the first phase of a national push to support Bitcoin mining and AI data centers, as the country moves to legalize cryptocurrency and attract foreign investments. The initiative, led by the Pakistan Crypto Council, will also help monetize surplus energy and create high-tech jobs, the finance ministry said in a statement. Coal-based power projects like Sahiwal, China Hub, and Port Qasim, currently operating at 15% capacity, are among those expected to be repurposed for this effort, the ministry said.
Express Tribune
10-05-2025
- Business
- Express Tribune
Consumers pay Rs69b for idle plants
Listen to article The inefficiencies in the country's electricity transmission system have burdened consumers with capacity payments of Rs69 billion in the quarterly tariff adjustment (QTA) for ex-Wapda distribution companies (DISCOs) for the third quarter of financial year 2024-25. Three power plants had been operating at lower capacity during the period under review, but they received Rs69 billion in capacity payments, which the electricity consumers had to pay. National Electric Power Regulatory Authority (Nepra) Member (Technical) Rafique Ahmad Shaikh has pointed out inefficiencies in the country's transmission system due to which Rs69 billion was paid to three coal-fired plants in capacity charges despite extremely low utilisation. He submitted these comments in his additional note on the QTA for the third quarter of 2024-25, in which a reduction of Rs1.55 per unit was allowed to refund Rs52.6 billion to the consumers of DSICOs and K-Electric (KE) in the bills for May, June and July 2025. According to him, transmission constraints continue to limit the utilisation of several cost-effective power plants located in the southern region, notably Port Qasim, China Power and Lucky Electric. Despite their potential to provide affordable electricity, these plants reported extremely low utilisation factors – approximately 1% for Port Qasim, 10% for China Power and 0% for Lucky Electric – during the quarter. Nevertheless, they claimed substantial capacity payments amounting to Rs26.95 billion, Rs30.88 billion and Rs11.26 billion, respectively. In total, around Rs69.09 billion was claimed in capacity charges despite minimal generation. This reflects a major inefficiency in the system and underscores the urgent need to address transmission bottlenecks and improve generation dispatch practices to ensure the optimal use of the available low-cost generation resources. It is noted that the capacity claimed by DISCOs for the third quarter of FY 2024-25 amounted to Rs362.395 billion, which was significantly lower than the reference figure of Rs459.286 billion. During the same period, electricity sales stood at 19,968 gigawatt hours (GWh) compared to reference sales of 21,846 GWh in the corresponding period. Ordinarily, a decline in electricity sales would result in an upward adjustment in capacity charges due to the fixed-cost nature of capacity payments. However, during this quarter, the termination of certain power purchase agreements (PPAs) and other adjustments related to the independent power producers (IPPs) operating within the system have contributed to a reduction against the projected capacity payment. Consequently, this led to a negative adjustment in the third quarter of FY 2024-25. Although the quarterly adjustment for the third quarter decreased significantly, he said that enhanced governance and more efficient system operations could have further improved electricity sales, potentially leading to an even greater reduction in the adjustment amount. In that regard, several key observations were highlighted for consideration and focused action by the relevant stakeholders. Genco-II (Guddu old), Genco-III (TPS Muzaffargarh) and Genco-I (Jamshoro Power Company) collectively claimed capacity payments of Rs1.237 billion during the quarter – Rs469 million, Rs350 million and Rs418 million respectively – despite generating no electricity during the period. These plants are characterised by high generation costs and poor operational efficiency, with little-to-no likelihood of receiving dispatch orders from the system operator in the future, given the availability of abundant and more cost-effective surplus capacity in the system. Continuing capacity payments to such non-operational and inefficient assets imposes an unnecessary financial burden on both the power sector and end consumers. A targeted and strategic review is, therefore, essential to rationalise these expenditures and improve the overall sector efficiency.
Express Tribune
04-03-2025
- Politics
- Express Tribune
Rs 50-60 billion theft finalized during this government's tenure, Senator Faisal Vawda
Listen to article Senator Faisal Vawda, Chairman of the Senate Standing Committee on Maritime Affairs, has alleged that a land scam worth Rs 50 to 60 billion was finalised during the current government's tenure, with an agreement signed on July 9, 2024, over 500 acres of land. The Senate Standing Committee on Maritime Affairs convened for a meeting, chaired by Senator Vawda, with key officials including the Chairman of Port Qasim and the Acting Chairman of Karachi Port Trust also in attendance. During the meeting, Senator Dinesh raised concerns about the absence of permanent chairmen for the Gwadar and Karachi ports, questioning why acting officials were running the operations. In response, Vawda highlighted the seriousness of the matter, stating, "We have three options: surrender, admit corruption, or fight." He further argued that if the issue of the Rs 50 billion theft had not been addressed promptly, the deal would not have been canceled within 72 hours. "If everything was proper, why was it canceled in just 72 hours? Together, we saved Pakistan's Rs 60 billion," Vawda added. Vawda also accused Port Qasim of issuing misleading rebuttals through the media to obscure the facts and mislead the public. He stressed that the land deal, involving 500 acres, was signed under the current government, with payments planned for only 365 acres. He claimed that a mere two percent advance was being paid for the land valued at Rs 60 billion. The Secretary of Maritime Affairs suggested that the issue could have been a mistake, but Senator Dinesh quickly responded, stating that a privilege motion should be raised against the Secretary for misleading the committee. Vawda strongly criticized the Secretary's defense, calling the theft of Rs 50 to 60 billion "not a mistake" but a serious issue. The Additional Secretary admitted to being unaware of the matter but revealed that they were part of the board overseeing the deal. Vawda added, "I will remind the Additional Secretary of many things."
