ISLAMABAD: As new signature power projects undertaken by the Pakistan Muslim League-Nawaz (PML-N) government suffer technical problems, Prime Minister Nawaz Sharif has called a special meeting of the Cabinet Committee on Energy (CCE) on Tuesday to find out why he was led to conduct early inauguration of the 1,200MW Bhikki Power Project in Punjab.

The prime minister is also expected to order release of more funds to existing power houses for sustaining their maximum generation capacity till the end of summer.

In the last CCE meeting, the prime minister had ordered the Ministries of Finance, Water and Power and Petroleum and Natural Resources to reconcile circular debt claims as the power sector had put total bills at Rs401 billion.

The above-mentioned ministries have hobbled around paying Rs50-70bn to the power sector out of the budget in view of ‘previously unseen payments’ made to Punjab and Khyber Pakhtunkhwa against net hydel profits.

The Pakistan State Oil had told the government that its operations were threatened by record Rs301bn receivables, mostly by the power sector.

The ministers for power, petroleum and finance continued their deliberations for a third time on Monday after the May 30 meeting of the CCE to fine tune project completion timelines and needed finances for the remaining few months of summer.

Informed sources said it would be for the second time that Punjab Chief Minister Shahbaz Sharif would be questioned for repeating the mistakes of controversial Nandipur Power Project – rushing processes through a non-technical team to complete projects and luring the prime minister into ribbon-cutting in haste at the cost of public money.

Calls in CCE meeting to question the rationale behind the early inauguration of the 1,200MW Bhikki plant

The premier had inaugurated the 717MW open cycle operations of 1,200MW LNG-based Bhikki Power Plant on April 19 with fanfare when it was put to initial test run – much before the formal Commercial Operation Date (COD).

Soon after, the plant struggled due to mechanical faults in the turbine and the Engineering, Procurement and Construction (EPC) contractor could not sustain its generation. It is completely out of order for almost 20 days now.

The EPC contractor was required to open-cycle commercial operation in March 2017 followed by combined cycle operations by August. The indicative tariff at about 6.5244 cents per unit was secured at the time of bidding that also included 5,000 hours of open-cycle de-rated capacity when LNG price was based on oil price of $37 per barrel compared to $60 per barrel now, with a proportionate increase in base tariff to about 9.3 cents per unit.

Bhikki Power Plant – a flagship project of the Punjab government – involved previously untested 9HA machines of General Electric (GE). The machines were also inducted in two other LNG power projects of the Ministry of Water and Power that were put on hold as a ‘precaution’.

A top government official confirmed to Dawn that a team comprising representatives of the EPC contractors led by Harbin Electric of China and Chief Executive of the Bhikki Power Project Ahad Cheema have rushed to France to convince GE to send its experts to fix the turbines on which the PML-N’s political future crucially depends.

Interestingly, Bhikki project is also led by a non-technical officer of the powerful Pakistan Administrative Service at a multiplied package of over Rs2 million a month.

Under the standard operating procedures (SOP), power plants are run for alternate two hours for few days and then subjected to reliability run test (TRT) on a continuous basis to qualify for COD, a stage when the power plant is formally linked to the grid and payment mechanism.

None of these steps could be followed as the Punjab government rushed into inaugurating the project.

Under the rules, no machine, equipment or turbine could not be procured in the public sector unless a minimum of 3-year of proven tests into commercial operations and certificates. In case of the three LNG projects, the government had agreed to an untested turbine that was on the drawing board at the time, even though objections were raised at the time of bidding.

The three plants – Bhikki of Punjab government and Balloki and Haveli Bahadur Shah of the federal government – with a total capacity of 3,600MW were considered crucial to end load shedding during the 5-year tenure of the current government.

Led by Harbin, the project consortium also involved AEPL, General Electric and their construction contractor Tianjin Electric. At the time of contract, the 9HA gas turbines did not exist and could not be field-tested for proven efficiency levels. The machines were designed and developed by the manufacturer later.

Published in Dawn, June 6th, 2017