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During the govt. of PM Shaukat aziz (2006)
ECC in its decision of 16th august 2006 approved 150MW
Rental power plants proposal by WAPDA for the
installation at Piranghaib multan as emergency measure
subject to acceptance of tariff by NEPRA, stipulating the
WAPDA should only rent as much power as is absolutely
necessarily to be utilized with high load factors for
economics utilization of capacity.
During the caretaker Govt. of PM main Muhammad
Summro (15/02/2008) the ECC approved four rental power
plant each of 200-300mw (combine capacity 1000-
1200mw) as rental power plants in private sectors.
During PPP govt. (1/9/2008) ECC approved 1000MW
project for IPPs induction as M/s Karkey Rental project
Karachi. ECC latest decision (21/8/2009) approved a total
capacity (1500mw) for induction of rental power plant into
national gird, payment 14% mobilization advance against
bank guaranty by the sponsor and adjustable in monthly
rental payment according after commissioning of plant.

Advantages of the RPP:

(1) Power shortage of 5000mw in 2010 envisaged in the
country during 2005, starting from 1000mw in 2006.
(2) Rental Power plant is short term solution for
emergency requirement accepted internationally.
(3) Quick delivery of power due to short construction
period.
(4) Service acquired with out buying the equipment.
(5) Installation in much smaller area, this could be installed
at choice stations.


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 ?
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Two rental power proposals received on 13/7/2006 from
GE & Alstom.
150 mw GE energy rental 10% advance payment against
advance bank guarantee .Monthly advance payment of 1%
for four rental months. Balance 86% in 36 equal monthly
rental services fee.
136mw Alstorm Power rental: 7% advance payment
against advance bank Guarantee balance 83% in 36
monthly rental services fee confirmed and irrevocable stand
by letter of credit.

The actual calculation done for a typical 200mw RPP

reveal that the figer works out at about $100 million per
year which is less then the fuel payment of $174 million for
typical IPP silly as falsely quoted .Calculation the annual
cost of providing fuel for 1900mw to RPP Plants as $2
billion actually work out to $1.3 billion.

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Rental plants tariff is slightly different then normal IPPs
based on capacity return on capital, interest on loan and
repayment O$M and other variable cost components. RPPs
is simple cycle plant have different fuel consumption
pattern can be combined cycle ones over period of time
Gas-based RPPs required 92% availability guarantee RFO-
based RPPs required 85% availability guarantee.
The rental power generation costs between 12-13 cent per
KWh. Rentals have 3-5 years technical life span if they are
based on second hand machinery¶s installation for power
generation.

Its very important that 3-5 years term of contracts its not
feasible to procure brand new equipment due to long lead if
recovered over period of 3-5 years will push up the rental
payment exorbitantly high (2-3 time of present rate) most
of the RPP are almost new being of less then 10000 hours.

 

§ Registration fee US$ 100
§ RFP cost US$ 2,000
§ Banker¶s fee for issuance of Bid bond
§ Bid processing fee
§ Consultant fee $20,000 plus out of pocket expenses up to
bid submission
§ Capital Investment in Plant and other fee
§ 2% of the Lump-Sum Rental on successful issuance of
Letter of Award to

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RPPs fuel price of Rs. 44818/tonne. The total cost of 8
and 14 RPP would be around Rs.119 billion and Rs. 207
billion respectively.
 However some of the RPP generation will displace the
generation from the least efficient GENCO plants therefore
the different in cost of services by borne by economy Rs.49
billion and 79 billion per annum of 8 to 14 RPPs.
8 RPPs would result in an increase of 6.1% the total
average custom tariff on top of already estimated of
subsidies and increase cost of generation of the feul price
ad introduction of new IPP. The 8 RPPs add a total burden
of around Rs.49 billion out of which nearly 37 billion will
be assed on to custom under monthly feul ATA rest under
adjustment mechanism.
Similarly 14 RPPs would require the total average
customer tariff to be increase further by 3.8% on top of that
required for 8 RPPs (total of 10% for 14 RPPs )result total
increase 35.5% for customer. The 14 RPPs add total
burdens of around 79 billion (additional cost differential of
29 billion) out of which nearly 50 billion will be passed on
rest under quarterly adjustment mechanism
  



RPP which are for the short term and so better assess to the
country project risks while the IPP is longer project
normally 20 years plus.
IPP is new plant while the RPP is to be used plant with non
transparent pricing at the tariff of 60% plant factor.
RPP vs IPP cost (at 60% plant factors)
No Name of RPPs Total Total Difference
cost of cost of
RPP IPP /kwh
&/kwh
1 Techno rental power 18.64 17.31 1.33
plant
2 Pakistan power 8.02 7.6 0.96
resources guddu
3 Chno-rental power 18.70 17.31 1.39
sailkot
4 Pakistan power 18.96 17.31 1.69
resources Multan
5 Young Gen faislabad 15.59 17.31 1.72

6 Karkey kardaiz 22.36 17.31 5.04

Karachi
7 Walters power 21.01 17.31 3.07
Karachi
8 Gulf rental power 17.82 17.31 0.51
Gurna
9 Sialkot rental power 19.16 17.31 1.85

10 Reshma-ower 20.26 17.31 2.94

Generation
11 Raba-power 20.27 17.31 2.98
generation
12 Kamoki energy 20.56 17.31 3.24

13 Walters power 10.82 7.06 3.76

international
14 Techno -E-power 18.84 17.31 1.33
Faisalabad
summundri

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Type of Fuel =RFO
Total rental period = 5 years
Total rental payment in = $ 565 million
Payment made of 36 months = $ 339 million
Return after 36 months =167%
Annual return =61%
Fuel cost component = 6.344/kw
Annual rent =113
When we purchase the rental power plant at valued of cost.
The sum of economics depreciation and interest rate.
Interest rate means that financial return that could have
been earned had the money invested else where. The
interest rate of IMF in 11% per year.
Interest rate of $139*11% = $15.98million per year
Depreciation of plant $139/5 =$ 27.8 million
Interest rate and depreciation rate are for the 5years