ISLAMABAD: M/s Lucky Power Company has accused Central Power Purchasing Agency Guaranteed (CPPA-G) of delaying the construction and completion of power purchaser interconnection facilities under Power Purchase Agreement (PPA).
In a letter to acting CEO, CPPA-G, Waseem Mukhtar, CEO, M/s Lucky Power Company, IH Haqqi has said that CPPA-G FME notice issued to his company under the Power Purchase Agreement of March 7, 2018 executed between the company and the CPPA-G, was a clear violation of Section 15.2(a)(ii) of the PPA which requires the CPPA-G to issue a second notice in respect of the Other Force Majeure Event (OFME) on account of Covid-19 and has to date, failed to respond to the company's request letters.
Further, the company has also not been provided with the information it has requested from the CPPA-G pertaining to the delays that the latter has experienced or continues to experience due to the OFME.
The company in its letter of September 9, 2020 has served a notice of cessation of OFME, whereby it has also notified the CPPA-G of its persistent efforts to achieve the Commercial Operation Date (COD) within the timeline given in the PPA.
Likewise, the company is expecting that CCPA-G will issue cessation notice in relation to its OFME claim pursuant to section 15.2(b) given that all business activities in Pakistan have officially been resumed by the federal and provincial governments for a considerable time, by enforcement of standard operating procedures (SOPs).
According to letter, as asserted in the company's previous notices, completion of the project on the part of the company is dependent on the timely completion of power purchaser interconnection facilities in accordance with Section 6.2 of PPA.
The power company says that based on the available record, it is evident that the acquisition of Right of Way (RoW) by NTDC for interconnection facilities still appears to be unattainable by the CPPA. As per our knowledge, none of the four entities - PQA, FOTCO, PSMC and Government of Sindh - have issued their approvals in relation to RoW. The delay on account of RoW acquisition has therefore concurrently existed over a long period of time (since 2016) and has surpassed the delay on account of OFME (if any), given that engineering, procurement and construction of interconnection facilities/transmission line are dependent on the RoW acquisition
In view of the above, we strongly urge you to immediately act on two fronts: (i) furnish to the company relevant information pertaining to the current status of construction of the interconnection facilities, the delay/completion of the interconnection works and particularly provide an update to the Company in respect of RoW acquisition.
In the event there is any delay in RoW then the matter may be placed before Federal Government (Power Decision) for seeking the Federal Cabinet to issue specific directions to POA. FOTCO, PSM and the Government of Sindh, through their respective concerned ministries, to immediately process the RoW approval to ensure timely power evacuation into HVDC (CPEC) line CPPA and NTDC to immediately engage to fulfill its obligations in relation to interconnection facilities under Section 6.2 of the PPA or may arrange some alternate till the resolution of
RoW to avoid any potential delay to the commissioning of the project and to gain a reasonable time to resolve RoW issues in order to timely evacuation of the electricity.
In addition to it, M/s Lucky has requested CPPA to comply with its obligations set out in the PPA and provide the company with the relevant status report on the OFME. The provision of the foregoing information is essential for the Company to conclude the construction and plan the testing of the complex.
Copyright Business Recorder, 2020
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