Reduction of GIDC has no impact on Hubco
- Sep 3, 2019 9:18 pm GMT
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The largest IPP of Pakistan, The Hub Power Company Ltd has stated that it does not come under the purview of the Gas Infrastructure Development Cess (GIDC).
The Company operates two Residual Furnace Oil based Power Plants, one Hydel Power Plant and has a Coal based Power Plant, which is a joint venture with China Power International Holdings Ltd. As the Company does not own or operate any gas-fired power plant; and therefore, was never subject to the GIDC.
It is pertinent to note that costs related to the fuel component for a Power Plant are pass-through items for IPPs and hence the imposition or the reduction of GIDC does not have any impact on the P and L of such IPPs. Therefore, any assertions made that the Company has received certain benefits from the recent waiver announced by the Federal Government with regards to the Gas Infrastructure Development Cess (GIDC) are not only false but are being made with mala fide intentions.
The Hub Power Company Limited currently produces over 2920 MW through its four plants spread over Baluchistan, Punjab and Azad Jammu and Kashmir. HUBCO is the only power producer in Pakistan with four projects listed in the CPEC out of which three are under-construction namely Thar Energy Limited (TEL) and Thalnova Power Thar (Pvt.) Ltd. and Sindh Engro Coal Mining Company (SECMC) at Thar Block II. The power generation capacity of the Company will enhance to over 3580MW after completion of the aforementioned power projects.