Terms of MoU with NIP for energization of BQIP not yet fulfilled: KE

In response to a query, K-Electric shared that while it continues to remain committed to energizing Bin Qasim Industrial Park (BQIP), the terms and conditions stipulated in the Memorandum of Understanding (MoU) signed with National Industrial Parks Development & Management Company (NIP) in February this year have still not been fulfilled. Under the MoU, KE was to receive PKR 500 million to initiate construction of a 64 MW grid at the designated “zero point” at BQIP along with a portion of costs that four business operating in the zone had volunteered to pay. As clearly mentioned in the MoU, energization of urgently needed 11KV feeders of the four zone enterprises is subject to the receipt of both these payments. It is pertinent to note that the load requirements of special economic zone have a minimum requirement of a grid for safe evacuation of power as mandated by NEPRA regulations and it is the developer’s responsibility to construct a grid to enable utility to provide electricity. However, no grid has been constructed by NIP in the facility.

NIP had further indicated in February, that the responsibility to fund the grid lies with Federal Government and that NIP shall immediately move a request/summary for obtaining funding support from federal government/ECC under Sec 27 of SEZ Act 2012 with the expectation that a formal commitment in form of ECC decision for release of funds will be shared with KE by 21st March. While the zones have held up their end, a formal approval and confirmation of release of funds from NIP/Govt/ECC decision in this regard is still awaited.

NIP had approached KE for construction of grid and an “interim” power request of 4MW with written confirmation that NIP will construct grid in case of any additional power needs. The “interim” supply has been provided by KE. Moreover, when NIP approached KE for an additional power requirement, a cost estimate for laying of transmission lines, building grid station, and supply of electricity lines at BQIP was duly shared by the power utility. KE had provided an initial tentative cost estimate of PKR 1.8 billion for an 80 MVA (64 MW) grid and 132 KV transmission line, extendable as per future needs.

As an expression of its good faith and commitment to energizing this project, KE had initiated preparatory work even before signing of the MoU. The power utility also offered to jointly present the technical and cost structure of grid to federal government/ECC along with NIP and continues to await this opportunity.

To facilitate the payment process, KE further offered NIP an installment facility with work to commence upon receipt of first instalment of Rs 500 million. Another option shared was submitting a bank guarantee. Unfortunately, NIP has not provided any of the above to KE till date.

Despite KEs supportive efforts to facilitate the process, few businesses operating in the zone are creating false impressions, spreading incomplete information. These businesses had earlier also attempted to put undue pressure on KE through various tactics to circumvent or violate policies and regulations.

The power utility continues to remain committed to powering industrial growth and facilitating industrial customers in the best interests of economic prosperity, through efforts which include exempting them from load-shed, meeting their growing power demand, reducing turnaround time to provide new industrial power connection and conducting energy audits to help them improve their energy efficiency. In this instance as well, KE looks forward to working with all stakeholders to ensure successful energisation of this SEZ, subject to all Terms and Conditions of the MoU being fulfilled by respective signatories to the agreement.

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