KARACHI: The Government of Sindh (GoS) has always been at the forefront of conceiving and successfully implementing innovative projects aimed at bettering living conditions in the Province of Sindh.
In this realm, GoS took a bold initiative to develop projects of vital importance such as roads, bridges, power plants, Thar coal, etc. on Public-Private-Partnership (PPP) basis.
The province of Sindh has by far the most effective PPP model surpassing federal government and other provinces. The frame work of PPP model is well documented with rules and procedures well defined for the investors willing to collaborate with GoS.
Power being the vital ingredient for the industrial development played effective role in formulating the designs of the power plant. The aim was not to let industrial activity suffer because of shortage of power but to spur industrial activity, uplifting the living conditions of the area and providing jobs to the people living close to the industrial zones.
To accomplish this aim, GoS decided to set up a Power Plant to support industry in a Public-Private-Partnership Mode so as to benefit from efficient and smooth working of a private entity while rendering government support for approvals, permissions, etc.
Knowing that this would be the first Independent Power Plant in a Public-Private-Partnership (PPP) Mode, GoS took another innovative decision by awarding the project to a private investor on the basis of lowest levelised tariff (over 25 years).
This method took care of all costs involved in setting up a power plant without getting into the details of EPC Costs, other costs and import of material, etc. etc.
In order to make the process of selecting private investor, a transparent system of award was followed. Accordingly, a Request for Proposals (RFP) was published in the national press seeking proposals from interested parties.
Number of national and international companies showed their interest by submitted the required documents and information. This was followed by a Request for Quotations (RFQ) from the shortlisted companies. After the technical evaluation by the high powered Technical & Financial Evaluation Committee (TFEC), three companies were shortlisted.
The financial proposals / quotations of the short-listed bidders were opened in the presence of the bidders. The lowest tariff quoted by the bidder was selected for partnership with GoS. The approval of the selection process, bidder’s details and successful bidder was then sought from the Sindh Provincial Cabinet, headed by the Chief Minister which was duly accorded.
The private investor, who had quoted the lowest levelised tariff for 25 years, was awarded the contract for designing, construction, installation, operation and maintenance of 2 x 50 MW Power Plants at the given site in Nooriabad area.
Project was sub-divided into two 50 MW Plants, so that the approvals remained within the scope of Sindh Province, without seeking any approvals from the Federal Government.
Nooriabad Power Project is the first IPP in the PPP Mode:
By an order of the ECC, 20 MMCFD of natural gas was allocated to the two plants. Subsequently, Gas Supply Agreement was signed with SSGC for a period of 25 years (the tenure of the project), and a dedicated gas pipeline of 20 km (approx.) has been laid for this purpose.
GoS allocated 50 acres of land at Nooriabad, just outside the Nooriabad SITE domain.
Nooriabad Power Project comprises 2 x 50 MW Power Plants which are being operated by two separate companies i.e. Sindh Nooriabad Power Company (Pvt) Ltd (SNPC) and Sindh Nooriabad Power Company Phase II (Pvt) Ltd (SNPC-II).
The tariff quoted by the Private investor was later contested and presented to NEPRA for tariff determination. NEPRA after knowing the lowest EPC cost, Project cost and tariff among all the power projects of similar configuration, awarded reference tariff to the project companies. Subsequent to the tariff award by NEPRA, a Power Purchase Agreement was signed with K Electric.
The Power Plant is located at about 100 km from Karachi, on the Karachi-Hyderabad Highway. Originally, it was conceived to supply power to HESCO for the consumption of electricity in Nooriabad Industrial area, however due to unavoidable circumstances and lack of interest of HESCO, the management was forced to sign a Power Purchase Agreement with K Electric.
Due to distant location of the power plant and the evacuating grid station at KDA Scheme 33, GoS has constructed a dedicated Transmission Line through its company STDC. The said transmission line is more than 95 km long, which evacuates power from Nooriabad Power Plants and supplies electricity to KE Grid Station at KDA Scheme 33.
STDC as an entity is viable and is generating positive income for GoS. STDC due to its useful gain in experience has embarked upon laying various transmission lines in the province connecting power plants with the consumers and has elevated to a Provincial Grid Company.
Recently, STDC has signed a 120 MW transmission line from Jhimpir to Landhi, Karachi for a large industrial group.
Selection of the Main and Auxiliary Machinery was a tedious process, especially because it was a combined cycle plant and higher efficiencies were required, in addition to reliability and local support.
Number of manufacturers were evaluated, but there were not many meeting the laid down requirements for Gas Engine technology and ability to conduct Commissioning Tests and Operations & Maintenance. After a lengthy process Wartsila, Finland was selected because they had reliable, efficient and high-performance Gas Engines.
Additionally, they have a fairly large population of their engines in Pakistan Power Sector, which meant that they would be able to provide local support. Furthermore, they were prepared to do the project on turnkey basis and conduct the Commissioning Tests and Operations & Maintenance required by NEPRA.
Wartsila proposed their main engines, auxiliary machinery, Heat Recovery System consisting of HRSG Boilers and Steam Turbines. Each power plant consists of five 20V34SG Gas Engines, five Alborg Boilers and One Shin Nippon Steam Turbine (generating 3.44 MW). Switchyard equipment has been supplied by CHINT, China, while ABB has supplied Protection and Data Acquisition Systems.
Each plant generates little more than 52 MW of power, and out of a total of 104 MW of electricity, after meeting the auxiliary load, the plant despatches 100 MW to the power purchaser.
The plant achieved COD in January 2018, and has, to date despatched 4,5665.689 GWh and a revenue of Rs. 63.40 Billion has been generated. SNPCs were financial structured as 80% debt and 20% equity. Equity was contributed by GoS and Private Sector Investor in 49:51 per cent ratio.
The debt was provided by National Bank, Sindh Bank and GoS Employees Pension Fund. Despite restrictions by NEPRA, The the entire debt of Sindh Bank has been retired before time.
The other debts obligations have been duly met. NEPRA due to some unfounded legal hurdles interpretations has withheld more than Rs. 3 Billion due on account of Return on Equity (ROE), which when available will be utilised to retire other debts in due course of time.
SNPCs also contributed to the exchequer in terms of GST and other taxes. SNPCs has paid Rs 7.25 Billion in GST and other taxes till date.
SNPC / SNPC-II is the cheapest power being supplied to KE, and is at the top most on the Merit Order, since its inception. SNPCs have substantially contributed to the power sector in Karachi by putting in their basket the cheapest power for more than six years, thereby providing significant relief for the people of Karachi.
Nooriabad Power Plant is a state-of-the-art plant where the entire operation is continuously monitored through thousands of sensors and the entire data is computerised for subsequent analysis and improvements where required.
SNPC / SNPC-II are one of the most reliable power plants in the country. On several occasions, SNPCs acted as Black Start power plant when there was a nationwide tripping of the power plants. This has been duly acknowledged by K Electric.
SNPC / SNPC -II provide direct gainful employment to more than 80 technical, commercial and non technical staff. Besides, O&M contractor also employ more than 40 60 personnel, thereby contributing to the national income of Pakistan.
As a environmental friendly companies, SNPCs have grown thousand of trees in the premises thus reducing the impact of green house gases generated by the thermal power plant. SNPCs as Corporate Social Responsibility contributes to the society by arranging free medical camps at the power plant site.
Despite, negative unsubstantiated propaganda, procedural and other hurdles, Nooriabad Power Project has proved to be an excellent project by performed its outstanding performance extremely well over the last six years.
The project is profitable and is generating cheap electricity for the consumers of Karachi. This was never expected by many in this country. Unfortunately, even today, this flagship project, which is the hero of GoS remains unacknowledged – an unsung hero.
Newspakistan.tv
