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HUBCO deal finally resolved

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    HUBCO deal finally resolved

    Welcome news indeed as the government finally settles the dispute with HUBCO and saves $63million for WAPDA as well. This will be one big giant leap to restoring investor confidence in Pakistan.

    WAPDA to save $63m from HUBCO deal: Investors' confidence to be restored, says Shaukat

    By Faraz Hashmi

    ISLAMABAD, Dec 17: The Water and Power Development Authority and HUBCO have agreed on a levelized tariff of 5.6 cents a kilowatt per hour, which will amount to a savings of $63 million per year to the former.

    "The settlement of the three-year old power tariff dispute with the HUBCO will restore investors' confidence", Finance Minister Shaukat Aziz told newsmen at a joint press conference, which was also addressed by Wapda Chairman Lt-Gen Zulfikar Ali Khan and HUBCO Chairman Mohammad Alireza here on Sunday.

    Chief Executive Officer of International Power Peter Giller, Ashraf Tumbi of Xenel, Najam Farooqui, representative of a Singapore-based investor group and David John of CWC, UK, were also present on the occasion.

    The finance minister, who led the government side in the talks, said: "The settlement augurs well for all the stakeholders."

    Mr Aziz added that it would prove a turning point for the foreign investment as well as the country's economy.

    Responding to a question about the corruption cases filed by Wapda against HUBCO, the finance minister said that the over-ridding issue before them was to achieve a power tariff which would be just.

    The settlement, ironed out after three days intense negotiations between the government and senior HUBCO executives late Saturday, will have retrospective effect, Wapda chief Lt-Gen Zulfikar Ali Khan said.

    The Wapda chief said that the HUBCO had agreed to lower its rate from 6.6 cents to 5.6 cents a unit.

    He added that the settlement would amount to savings of $63 million per year to Wapda and a total of $3 billion over the remaining 27 years life of the project.

    "It will usher in a new era of relationship between Wapda and HUBCO," he said, adding that the water and power authority was looking ahead for making the project more economically by converting it to gas.

    Lt-Gen Khan said that the revised agreements struck by Wapda with all the Independent power producers would result in a total saving of $6 billion.

    The revised agreement with Kapco would save $1.5 billion and an equal amount would be saved through downward revision of power tariff by other 16 IPPs.

    "We are blessed to have this agreement in the month of Ramazan," said Mr Alireza. He also invited the finance minister to Saudi Arabia for attracting Saudi investment.

    He said Pakistan had tremendous potential for foreign investment, adding that they were also considering to undertake a project of laying a transmission line from HUBCO plant to Karachi and conversion it to gas.

    Mr Alireza said a sizable investment would be made in both these projects.

    He was asked as to how he would justify his original agreement of 6.6 cents per Kwh, which had allegedly been achieved through kick-backs. He said they had got a commercial deal and now they had agreed on reducing their returns.

    He said, they pioneered the private power project in Pakistan and invested eight long years in negotiations and construction of the project.

    YES party at my place!!!
    You can't fix stupid. So might as well troll them!