The Hon. Arkam Ilyas

¶ 01 The Auditor General had granted concurrence. After that, all the Auditor General’s recommendations were incorporated and the Agreement was signed on 24 November. There are documents pertaining to this; they can be tabled.

¶ 02 There is a constant claim that a huge loss has occurred due to this. Different figures are being thrown around. Somewhere it is said that about Rs. 8,000 million has been lost. We cannot accept that. That figure is calculated by valuing the entirety of the energy shortfall as if produced by diesel. If we clarify properly, we generate electricity from several sources: hydropower, solar, wind, coal, diesel, naphtha and various fuels. The average unit cost for hydropower is under Rs. 3 per unit; for wind, under Rs. 12; for solar, between Rs. 15 and Rs. 37 — especially Rs. 37 because agreements signed by the Opposition for 20 years locked those rates in. Thus, solar ranges roughly from Rs. 15 to Rs. 37 per unit. Coal power is around Rs. 20 per unit; diesel ranges between Rs. 60 and Rs. 75 per unit.

¶ 03 The Rs. 8,000 million loss figure is built on a premise that the full production was by diesel. In reality, diesel is predominantly used during the night peak from 6.00 p.m. to 10.00 p.m.; afterwards we switch to other sources that are three, four, even five times cheaper. The true incremental cost due to reduced coal usage can only be determined at the end, based on actual dispatch and cost differentials.

¶ 04 From the Audit, there is an estimate of around Rs. 22.3 billion loss. However, as at today, for 13 vessels, we have withheld about USD 17 million (around Rs. 5.1 billion) from the supplier — not paid. In addition, we hold their bid bond of USD 15 million, about Rs. 4.5 billion. That is around Rs. 9.6 billion in total withheld from the company. If the loss is Rs. 22.3 billion, we already hold about four times that in securities relative to some of the claims we hear. Under our time, for the first time in 15 years, we have imposed about USD 0.5 million in demurrage/penalties for delayed vessels. We intend to assess delay penalties for all delayed vessels in recent years and recover from the companies. We stand for the state, not any supplier; if suppliers have erred, we will recover penalties from them.

¶ 05 Where the Auditor General pointed to shortcomings in our agreement, we were informed and have adjusted forthcoming tenders accordingly. In our procurement and in penalty recovery, we have not compromised any standards.

¶ 06 Finally, no amount — not even a cent — will be loaded onto upcoming electricity bills to pass any loss arising from this coal issue onto the people. We have demonstrated the calculations. We currently withhold about Rs. 9.6 billion, and if further issues arise with future vessels, we will recover further. We will not charge the public a single rupee. Thank you.