Notice sent to KfW: minister

The Ministry of Water and Power has sent a notice to the German state-owned Bank KfW for inaccurately concluding that Pakistan's power sector performance has not improved particularly that of three public sector Generation Companies (Gencos) which has damaged the reputation of the government. KfW in its recent report had argued that three major public sector power plants - Muzaffargarh, Jamshoro and Guddu - cumulatively underperformed over the past three years and produced fewer electricity units compared with 2010 and 2013. As the Bank's analysis appeared in the media, Ministry of Water and Power refuted the conclusions based on data released by a subsidiary of the Ministry, NTDC in a press release.
Unconfirmed reports suggest that the government has also raised this issue with Pakistan-based senior management of KfW. However, no official confirmation of any such contact is available. However, when Minister for Water and Power, Khawaja Asif Khawaja was asked on Friday on his comments on the report he said that it was inaccurate and the Government of Pakistan has served notice to the German state-owned Bank.
"We have served notice to KfW in writing and contested their claim and asked them to compare their figures with the figures of Water and Power Ministry to reach the truth," he added. In reply to another question, the Minister for Water and Power said that Finance Ministry has remitted Rs 30 billion to the Ministry of Water and Power which has been released to the IPPs.
Asked whether IPPs would withdraw sovereign guarantee enactment notices issued to the Government of Pakistan, the Minister said that it's the IPPs choice to withdraw it or not. Independent Power Producers Advisory Council (IPPAC) in its advertisements in the print media claimed that power sector circular debt has again soared to Rs 414 billion excluding hydel receivables; and threatened to call sovereign guarantees. According to sources, PPIB received notices from IPPs and sent then to the Ministry which forwarded them to the Ministry of Finance. When contacted, one of the representatives of IPPs told Business Recorder that the government has paid around Rs 30 billion to the IPPs against claims of Rs 52 billion, which implies that default is still hanging on the heads of government.