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Hubco asks Wapda

to stop making

'false charges'

KARACHI: Hub Power Company Limited (Hubco) has asked Water and Power Development Authority (Wapda) to 'stop making false charges' and focus its efforts on providing people reliable and low-cost electricity.

A Hubco spokesman said here on Wednesday the company produces lowest-cost power available in Pakistan but "inefficiencies of Wapda" were denying the people economic benefits of that low-cost power.

He expressed the hope that the most recent framework for resolving Hubco-Wapda dispute, submitted to the Minister of Finance at his request several weeks ago, will provide a constructive framework for negotiations. "We believe the Finance Minister can play a very important role in bringing this dipuste to an end, if he is empowered to do so. We hope, that will be the case, so that Hubco and Wapda can both get back to providing reliable electricity at an affordable costs," he added.

He said Hubco has held more than 50 meetings with Wapda during the last two years and consistently offered to negotiate a lower tariff and offer other substantial financial benefits to Wapda but every offer has been rejected or not responded.

Responding to continuing stream of what the spokesman called false and misleading charges including claims that its tariff for electricity was harming the economy of Pakistan, he called upon all parties to end the bickering and focus on the needs of Pakistan's economy.

"Hubco is a Pakistani company, run by Pakistani people and most of our shareholders are Pakistanis," said the spokesman. "To suggest that we are doing anything to harm to the people or the economy of Pakistan is simply a smokescreen to hid the truth. Such charges are both ridiculous and false."

He noted that the reason the government became involved in a major programme to develop Independent Power Projects (IPPs) in Pakistan was because similar projects in other nations countries had proven to be economic and efficient. "Around the world, IPPs have been very good at producing electricity at prices constantly lower than that produced by state-run facilities."

He said Hubco plant was built on schedule and on budget and it is very modern, efficient plant. "Given these facts, and proven record of similar projects around the world, it should be obvious that the problem is not with the plant, it is with how the plant is used by Wapda our only customer," the spokesman said.

He noted that several independent reports confirm that Hubco's price for power was comparable to that of other IPPs in the region and lower than some. According to the World Bank, Hubco's tariff is most likely lower than the real cost of Wapda expanding its generating capacity." The World also noted that Wapda's projects generally involve "serious cost over-runs, delay and less than satisfactory operational efficiencies."

He said Wapda could receive more power from Hubco plant, and thus lower its per-unit cost for electricity, but Wapda chooses to run its own less-efficient plants instead.ÑPPI