Govt, NTDC not serious towards payment: IPPs

RECORDER REPORT

KARACHI: Eight Independent Power Producers (IPPs) that are in litigations for their rights in the superior court are dismayed that the National Transmission and Dispatch Company (NTDC) and the federal government are not serious in paying their outstanding dues and their dues continue to accumulate despite being paid Rs8 billion last week.

Industry experts point out that after reconciliation of outstanding amount at the direction of the Supreme Court, the IPPs’ net outstanding dues stood at Rs45 billion. He said the government had promised on behalf of NTDC to make part payment of Rs24 billion to these IPPs in equal monthly instalments of Rs8 billion starting from July. They said the first instalment of the payment was released on August 8, instead of July.

In the meantime, they said, the amount outstanding against NTDC for electricity supplied continued to accumulate as it failed to make payments of current invoices.

“Now, the situation is that even after the payment of Rs8 billion, dues outstanding against NTDC have again accumulated to Rs53 billion,” they said, adding that this had happened against the direction of the Supreme Court.

The apex court had ruled that Rs24 billion should be paid in addition to payment of current bills so that outstanding amount of these IPPs would reduce, they said.

According to them, if the government continued retiring its debt at the current pace, the outstanding amount would “go on increasing and create liquidity problems for the IPPs”.

“They would have no cash to meet their fuel requirement and other current obligations,” they maintained.

Energy sector experts appealed to the government to implement its contract with the IPPs in letter and in spirit.

“The image of the country has already suffered badly because of the government’s failure to honour its sovereign guarantees.”

They cited media reports according to which foreign financiers were reluctant to provide funding for the Neelam Jhelum hydroelectric project, as the sovereign guarantees of the government have become doubtful. This, they said, had resulted in suspension of work on this vital project.

Similarly, they said, banks were reluctant to provide credit to new power sector projects that “does not auger well for the country’s energy security”.

They said that marginalising eight most efficient IPPs was increasing the cost of power production.

They said government was running inefficient thermal plants at very high cost, adding that IPPs could produce twice as much electricity from the same amount of resources that the government was providing to public sector power plants.