AI Jomaih-KES dispute: Ministerial committee to find ‘amicable’ way out

ISLAMABAD: The government has decided to constitute a three-member ministerial committee to find an amicable way out to the dispute between AlJomaih and KES Power shares in K-Electric, sources in Privatisation Commission told Business Recorder.

“A ministerial committee composed of Minister for Energy (chair), Minister for Privatisation, and Minister Law &Justice, would assess any specific interest of GoP in the matter of K-Electric regarding the shares dispute and suggest a viable future course of action,” the sources added.

The committee would also evaluate the proposal of Privatisation Commission (PC) that AI-Jomaih issue of transfer of K-electric shares be assigned to International Dispute Cell of Attorney General for Pakistan (AGP).

Resolution of issues facing KE: Saudi Aljomaih Power voices its concern over delay

Approval for the committee would be sought from Executive Committee of Special Investment Facilitation Council (SIFC).

On October 4, 2023, Shan A Ashary, the Saudi Group’s investment advisor and ex-Chairman KE told media that Shanghai Electric Power (SEP) has renewed its commitment to acquire 66.40% shares in K-Electric, adding that new deal with SEP should to go up to $ 2 billion now instead of earlier offer of $ 1.77 billion.

On September 12, 2023, Ministry of Privatisation shared a self-explanatory note of Ministry of Law and Justice with the Power Division in which the latter noted that suit No 1731/2022 relating of KES Power and K-Electric Ltd is pending before the Sindh High Court at Karachi.

Law Ministry, sources said has advised Privatisation Ministry to pursue the said civil case vigilantly. Further, since the matter has strategic importance, the Legal Counsel representing Privatisation Ministry may be instructed to request the Court to maintain the interim order passed in the said civil court.

The Prime Minister Office has also asked the concerned Ministries to keep a close eye on proceedings at a court in the Cayman Islands.

The sources said dispute between AI-Jomaih of Saudi Arabia and KES Power is well known to everyone at the government level as the government has sympathies with Al-Jomaih due to a very special relationship with Saudi Arabia.

Insiders in Privatisation Commission argue that since the Sale Purchase Agreement (SPA) was signed between the Government of Pakistan (GoP) and KES Power, liquidation of KES Power should not or would not have been filed with prior consent of GoP.

“If liquidation is filed outside Pakistan, GoP should have become party to that process immediately. For national interest it is very important,” the insider added.

A Task Force headed by former Prime Minister Shahid Khaqan Abbasi, constituted by the former Prime Minister Shahbaz Sharif, had finalized its recommendations on K-Electric which are now expected to be submitted before the caretaker Federal Cabinet.

The Task Force has submitted the following recommendations: (i) PPAA and ICA: firm supply of 1000 MW from existing 650 MW for ten years. KE would add own generation during this period;(ii) TDS agreement- commitment by Finance and Power Division of full subsidy budgeting, audit by AGPR and firm payment timeline with the late payment penalties; (iii) Mediation Agreement - agreement between CPPA-G, KE and SSGC for resolution of disputed LPS, non-binding arrangement for available settlement and outstanding number agrees as of June 30, 2022; and (iv) streamline tariff determinations - with the approval of federal government guidelines be issued to Nepra for streamlining application of Quarterly Tariff Adjustments (QTAs).

Copyright Business Recorder, 2023