Inefficient CPPs inflicts Rs 70 billion loss annually on country

Lahore: The All Pakistan CNG Association APCNGA on Saturday questioned the policy of providing cheap gas to captive power plants CPPs to gain political favors which is causing a loss of Rs 70 billion to the public exchequer per annum.

The technology, efficiency, cost, consumption, production, and other parameters related to the CPPs are questionable, as industry has been using scrap plants in place of modern and better equipment, said Ghiyas Abdullah Paracha, Chairman Supreme Council APCNGA.

The average efficiency of 113 CPPs, mostly installed in textile units, stands at 28 per cent meaning that they are wasting 72 per cent of the gas in the process of generating electricity, he said while speaking to APCNGA’s central executive committee.

Ghiyas Abdullah Paracha said that data of SSGC and SNGPL shows that CPPs are getting 454 mmcfd gas per day out of which 327 mmcfd is lost to inefficiency causing loss of around 19 crore per day.

Planning Commission and Ministry of Water and Power have termed primitive CPPs a major drain of indigenous hydrocarbon resources but to no avail, he said, adding that statements of crackdown against wasteful CPPs by ministry of petroleum is mere eyewash.

He said that government is pleasing owners of CPPs on the cost of domestic consumers, CNG, fertilizer and general industry. Many industries closed since long are being provided gas while the power generated through that gas is being sold to running industrial units without approval from Nepra which must be probed, he demanded.

He said that the silence of concerned departments on the issue is not only amazing but also criminal at a time when whole nation is reeling under power crisis.

The country would not have faced energy shortages of such magnitude if decision were taken on merit and the gas allocated to CPPs was provided to efficient power houses, he said.

Power generation companies are facing heavy losses as gas consumption as well as some 2000 mw load has been shifted to the unregulated gas gulping CPP sector which do not require a license and have no performance and efficiency checks.

The policy has hiked operation and maintenance cost of the Discos, average tariff is going up while average sale declines causing losses to the government while CPPs thrive on economical gas and support of petroleum ministry.

Criticizing the move to lower the efficiency benchmark for CPPs, Ghiyas Abdullah Paracha demanded a probe into the issue to fix responsibility on those who played havoc with the country for their personal welfare.

He demanded an immediate comprehensive and independent audit of captive power plants, banning Discos buying power from captives using cheap gas as fuel, and concrete steps to improve the efficiency and avoid wastage of precious natural resources in the national interest.

The government needs to increase gas price for CPPs by a minimum of 150 per cent to resolve all issues, ensure efficiency and reduce load shedding.

There is a need for a well integrated power policy which addresses the various issues to ensure an overall development of the sector and economy.