PPIB cancels ministry-IPPs meeting

The Ministry of Water and Power has reportedly decided to snub Independent Power Producers (IPPs), prompting the Private Power& Infrastructure Board (PPIB) to cancel the second meeting scheduled to resolve overdue payments issue, well informed sources told Business Recorder. "Minister for Water and Power, Khawaja Asif is furious with IPPs for its sustained media campaign against the government through the IPP Advisory Council," the sources added.
PPIB's Managing Director, during the first meeting, had conveyed his inability to resolve matters by stating that he had no authority to commit to anything with the IPPs without the backing of Water and Power Ministry. He had scheduled a meeting on March 15, 2017 but cancelled it at the eleventh hour, the sources added.
Thirteen IPPs which served demand notices to the GoP / NTDC were paid only Rs 13 billion which was only 7 per cent of the overdue payment. The Water and Power Ministry raised Rs 30 billion from commercial banks, interest on which will be paid by the Ministry of Finance for failing to release required amount of subsidy. The government has not paid the overdue amount sought by the IPPs under the guarantee but under another head. "What can we do if the Ministry of Water and Power refuses to discuss the issue? We will take action after the government sends its response to the notices formally," said one of the representatives of IPPs.
According to PPIB, it receives receipts of demand notices under respective GoP guarantees from 13 IPPs. These demand notices are a continuation of the earlier notices served to the power purchaser which were forwarded by PPIB to the Ministry of Water and Power, National Transmission and Despatch Company Limited (NTDCL) and Central Power Purchasing Agency- Guaranteed (CCPA-G) for immediate release of outstanding payments due and payable under and in accordance with respective Power Purchase Agreements (PPAs) to the IPPs in order to avoid default by the power purchaser.
However, as per demand notices, the power purchaser was unable to release payments to the IPPs and a total of Rs 33.394 billion is payable by the power purchaser to the ten IPPs as follows: (i) Altas Power Ltd- Rs 4.555 billion;(ii) Attock Gen Ltd- Rs 4.5 billion ;(iii) Halmore Power Generation Company Ltd- Rs 880 million;(iv) Liberty Power Tech Ltd- Rs 5.361 billion;(v) Nishat Power Ltd- Rs 4.881 billion;(vi) Nishat Chunian Power Ltd- Rs 4.1 billion;(vii) Orient Power Company (Pvt) Ltd Rs 1.881 billion;(viii) Saif Power Ltd- Rs 1.5 billion;(ix) Saphire Electric Company Ltd- Rs 1.396 billion and ;(x) Hubco Narowal- Rs 5.025 billion. PPIB also sent claims amounting to Rs 9 billion of AES (Pakgen), AES( Lalpir) and KEL Power.
PPIB maintains that respective GoP guarantees are part of the project agreements and have been executed to secure payment obligations of the power purchaser under the respective power purchase agreement. As per the terms and conditions of the respective GoP guarantees issued to these IPPs, the GoP( being guarantor ) is obliged to make payments of any amounts due and payable by the power purchaser under respective PPAs which have not been paid with 10 business days following receipt of such demand notices under the GoP guarantees.
"As the demand notices were received by PPIB on March 2, 2017, such payments if due and payable by the power purchaser under the respective power purchase agreement were due and payable by March 13, 2017 under the respective GoP guarantees," the sources added. Ministry of Water and Power had also been requested to intervene in the matter and exercise all endeavours for the earliest release of undisputed overdue amounts under the respective power purchase agreements to the IPPs.
"If the current payment controversy continues then who will invest in Pakistan? We are just demanding the money that is ours legally and requesting the authorities to sit with us and sort it out. We are ready to talk. Our last word always is we are ready to sit and discuss," said another stakeholder.