Pakistan Army assisting civil administration in containment efforts of COVID-19
RAWALPINDI: Pakistan army is assisting civil administration to contain spread of COVID-19 across the country, said Inter-Services Public Relations (ISPR) on Wednesday.
Troops are busy in relief efforts and distribution of more than 350000 Army assistance packages.
According Inter Services Public Relations (ISPR), Pakistan Army troops distributed Army assistance packages which were purchased through contributions of Army’s announced salary donation for COVID-19.
The packages are being distributed among daily wagers, handicapped, labourers, widows & needy people including far flung areas of all four provinces, AJK and Gilgit Baltistan.
Pakistan’s COVID-19 cases rise to 14,885
With confirmation of 806 new coronavirus cases in the last 24 hours in Pakistan, the number of total confirmed cases in the country has jumped to 14,885.
According to National command and Operation Centre, 11,133 people are still under treatment from which 111 are said to be critical, while 3,425 patients have recovered so far.
With 26 more deaths in last 24 hours, the number of total coronavirus fatalities now stand at 327.
The country has conducted 165911 tests so far to detect the virus.
The post Pakistan Army assisting civil administration in containment efforts of COVID-19 appeared first on ARY NEWS.
The Solution to the Pakistani Power Imbroglio - Part 1
ReplyDeleteDoom No.1
IPP/RPP Power APM, is at 12-16% in USD - which,in effect,affixes the power tarriff in USD,for sale by the IPP/RPP,to the TransCo,at a certain PLF,with passthrough of fuel,taxes and capacities,in a tolerance band,with bonus/incentives and penalties.
Solution No.1 to Doom No.1
The rationale for the USD - APM , is that the investors could have invested,in thermal loads - base and peak,in the USA and EU,and would have earned a return in USD .That is bull,as power plants based on coal,are banned in the EU, and even for liquid fuel,and gas plants - the "effective" return,is subject to market risk - and the minimum return, is way below,what Pakistan offers.dindooohindoo
It is assumed that the APM,is subject to tax/WHT etc.,subject to sectoral holidays.In other words,over the life of the project - it should not be that the APM in USD,is tax free,at point of profit,or at the point of repatriation.That would be a disaster,as the US/EU conventional power sectors,have no absolute tax waiver.
So the Dollar peg,has to reduce.In addition,the RPP and IPP cannot have the same APM rates ,in USD,for the same or different fuel,at the same or co-terminus times - as the RPP has a practical and technical exit option,from the PPA and the Pakistani nation.
Solution No.2 to Doom No.1
However,the IPP/RPP will state that they have factored Country and Grid Risk,in the APM. The Risk premiums on soverign paper,and semi-soverign paper of Pakistan,is known,and the co-terminus, risk premium is traded and known,on several Risk Exchanges all over the world.
So the APM has to be the minimum assured yield,on thermal power plants,for base load and peak load,in USD,in the USA/EU, PLUS,the risk premium for Pakistan
The soverign debt of SBP,in USD,net of US G-sec yields,for co-terminus tenor,is the country risk for Pakistan,in BPs.The Risk Premium loaded by the IPP/RPP,cannot exceed this BP spread.
Solution No.3 to Doom No.1
Unilever has invested in Pakistan - w/o an APM in PKR or USD.People can live w/o food for 3-5 days,but not w/o power.However, Unilever has an effective ROE of 30-50%,which cannot be given to a power plant.Also,Unilever has no soverign exposure, or guarantee,from the Pakistani Government.
Therefore,at a USD-APM,of 12-16%,after,say 6 years,when the entire equity is recovered,then either the APM is to be in PKR,or the USD-APM in USD has to be halved - as there is no empirical credit default,and the USD equity is recovered from the project.
Solution No.4 to Doom No.1
Even assuming an APM at 12-16%,in USD,the Risk premium,has to be on a floater mode,and cannot be fixed throughout the PPA tenor.The difference can be adjusted,in the 1st quarter, of a FY,for the previous FY,based on monthly or weekly averages,of the risk spreads , converted into Basis Points.Risk premiums,per se, and Country Risk premiums change over time - and an IPP,cannot claim a valid bet,on implicit soverign risk.
The Solution to the Pakistani Power Imbroglio - Part 2
ReplyDeleteSolution No.5 to Doom No.1
If all the above solutions,were not thought of,at the stage of the MOU/PPA, AND it was on account of coercion,corruption and /or fraud - then the PPA and MOU,is void ab initio.
Basically,the minutes of meetings by bureaucrats,will prove the fraud.In any case,any fundamental vulnerability or inequality or inequity or foolishness, in any contract,is a sign of fraud and coercion.
Power Demand will crash, during and post COVID.
CPEC will have its own Gwadar based CPP.A SEZ needs CPP, as a pre-requisite - and the PRC,will not buy power from the IPP/RPP - but they may buy,from the state grid - but only,at levelised rates.
IN ANY CASE,COVID is MORE THAN a Force Majeure event,as a Force Majeure event - after it occurs - has an ending and a quantification.For COVID,there will be NO CURE,and there MAY BE a vaccine - but only,after a long time.Hence,power demand,will disappear - and that is the basic premise,of a power project.Hence the IPP/RPP,have to re-negotiate,or exit and go,to the Hague.
Several nations will terminate PPAs and Fertiliser plants, on APM and Capacity charges - as even if a vaccine comes,BILLIONS will NOT Take the shot.
Doom No.2
In nations like Pakistan - IPPs use multi-fuel power plants,and bill the grid, for fuels which they do not have,or which do not exist,in that specification.So a liquid fuel RPP,on a ship,or an IPP on land - can use several types of liquid fuel.So they have paper and tank stocks of various fuels - whose ACTUAL stocks,are NEVER checked by the state - and the clown auditors,do not have the technical skill,to check the stocks,from several angles.In addition,the shipping documents,and the ship draft and tank meters,and dips etc.,are all fudged,within a tolerance limit.
So,in a compromised or inept systen,WITHIN A CERTAIN LIMIT, the IPP can bill for expensive fuel,which it did not have,or claim that the demurrages were paid,as the tanks were full,as the state did not have facilities,for power evacuation etc.Even a coal based Power plant,at a point in time,will have several grades of coal,in different storage conditions,and of different specifications.
Solution to Doom No.2
INTENSIVE,SYSTEMIC,ONLINE,TECHNICAL - BUT NON INTRUSIVE PHYSICAL VERIFICATION OF STOCKS,and the entire supply chain,from load port of fuel port to discharge port,evacuation to port tanks,port tanks to IPP/RPP tanks,meters,pressure and temperature gauges,sludge tanks etc.
Doom No.3
The FX loss on IPP/RPP PPA.The concept of keeping the FX position,on the IPP/RPP unhedged,especially since the SBP,in effect,affixes the PKR float - with no NDF trades - makes no sense at all.It is assumed that the IPP/RPP.,do not get the USD index gains on the retained earnings,at all - as the IPP/RPP,should have the dollar index frozen,on the date of the retained earning (which would be,the end of the FY)
If the PKR declined by 100$,in say 4 years,then the USD-APM of 16% or 12%,is 32& or 24%,in PKR
If the world economy is doomed,PKR exports will fall,manufacturing and power demand will crash,PKR will crash and THE CAPACITY CHARGE IN USD will be paid to IPP/RPP - which is a dead loss to the state.At the minimum,the state can hedge the USD Risk - as Imran Khan cannot revive the world economy.
Solution to Doom No.3
The Pakistan state has to HEDGE THE ROE-APM in USD,as the SBP knows the daily IBR,in the morning and the evening - before the sun rises,and before the sun sets.Irrespective of the nature of the project (BOO/BOOT etc.),the IPP has to forfeit the power plant salvage and sale value,at any stage of the project,except when the state is in default.dindooohindoo