View of Turkish ship-mounted rental power plant during its inauguration ceremony held at Ibrahim Hyderi area in Karachi on Sunday, November 21, 2010. – Photo by PPI

LAHORE: The much-trumpeted ship-mounted Turkish power plant has an installed capacity of 220MW and not 232MW as stated earlier and it will not be able to contribute more than 190MW to the national grid if auxiliary losses are factored in and, therefore, will not meet its contractual obligations.

According to sources, Karkey Karadeniz Elektrik Uretim has been given an advance payment of 14 per cent (Rs6 billion) of the total rental value for 232MW for five years.

When contacted, the company’s spokesman Assad Mehmood conceded that the plant was of 220MW capacity, but said that another 110MW plant would arrive soon to meet the shortfall.

Analysts are of the opinion that the company should have come clean on the issue if that was the situation. “Why have the company and the water and power minister been talking about 232MW,” they asked.

The plant was to contribute 232MW to the national grid from the beginning. “If it cannot, it will only delay its commercial operation and attract penalties.

The company should have informed the public, in advance, about its plan to import a second plant and the date of its arrival,” one analyst said.

He said the plant’s operation might be further delayed because the company was yet to make fuel supply arrangements which would take eight to 10 weeks because of the huge quantity of fuel needed by the plant.

The plant will need 1,500 tons of fuel daily and it should have 21 days’ stock. Importing 30,000 tons of oil is a huge task and furnishing guarantees and opening letters of credit take time.

“Why all these arrangements were not made in advance?

“Where was the due diligence of the ministry which was quick to take credit without taking responsibilities of ensuring the allied arrangements,” another analyst asked.

To make the matter more complicated, the plant does not carry any storage barrage. Where will it store such a huge quantity of furnace oil?

The ship itself cannot hold more than five per cent of the total requirement for generation.

Mr Mehmood said the company would soon sign a fuel supply agreement and the plant would start operation by the end of this month. He also admitted that no storage barrage had accompanied the plant, but said it would arrive soon.