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Govt talks with PSMA for 3,000MW power

04 February, 2013

ISLAMABAD: At the culmination of its term, the PPP-led government has initiated negotiations with Suger Mills Association for power generation through ‘bagasse' to apparently overcome the yawning energy crisis facing the country but many are seeing the move with doubtful eyes.

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ISLAMABAD: At the culmination of its term, the PPP-led government has initiated negotiations with Suger Mills Association for power generation through ‘bagasse' to apparently overcome the yawning energy crisis facing the country but many are seeing the move with doubtful eyes.

The move was viewed with suspicion, as the main stakeholders are of the view that government should have initiated work on the project soon after coming into power and the move a few days ahead of the culmination of the government carry something fishy.

The government that recently has started negotiations with Sugar Mills Association to generate electricity from bagasse was supposed to finalise agreement with sugar mills 4 years back. Taking up the matter that was dead has created doubts about its motives that would turn to reality or might prove wrong when the agreement would be signed.

All of a sudden President Zardari has started taking interest in the project whereas he knew about this option from the very start. Certain quarters apprehended that costlier price of electricity for the sugar millers might be approved at this moment.

It is worth mentioning here that in January 2008, All Pakistan Sugar Mills Association had presented the idea that they could generate almost 2500-megawatt electricity from bagasse. At that time they were demanding 11 cents per unit from the government but were ready to generate electricity on 10 cents if an offer was made.

Then Pakistan Peoples Party came into rule and they were presented the proposal again. Country was suffering from acute shortage of electricity but the government instead of choosing the easy way opted for Rental Power Plants that idea ultimately failed. The government kept on rejecting the proposals of PSMA and insisted it would offer not more than 8 cents per unit cost of electricity. Sources in the power sector believed that sugar millers were even ready to finalise it on 9 cents per unit as baggase did not cost them being the by-product of sugarcane and they just had to install plants therefore starting electricity generation was a feasible business for them.

It is also worth mentioning here that while the government was stuck on 8 cents per unit cost of electricity for the millers, it made agreements with RPPs to buy electricity from them that was going to cost 18 cents per unit and even more.

Presently the government has not given any indication about the expected price of electricity to be given to millers but has claimed that it was going to launch the project that could generate 3000 megawatt of electricity.

End.


 
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