KE and govt entities: ECC approves PD proposal for signing various draft agreements

ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet has decided to approve the proposal of the Power Division for signing draft PPAA, ICA, TDA and Mediation Agreements between K-Electric and government entities.

The meeting presided over by the caretaker Finance Minister Dr Shamshad Akhtar on Friday took up the matter of approval of the draft Power Purchase Agency Agreement (PPAA), Inter-Connection Agreement (ICA), Tariff Differential Agreement (TDA) and Mediation Agreements (MAs) to be signed with K-Electric.

The Ministry of Energy (Power Division) briefed the Committee on the observations made by the members of the ECC and provided the requisite additional data on the working of CPPA-G.

Govt-KE draft agreements need revision: Nepra

After detailed discussion and deliberation, the ECC decided to approve the proposal of the Power Division for signing of the draft PPAA, interconnection agreement (ICA), TDA and Mediation Agreements between K-Electric and GoP entities.

The ECC also directed the Power Division to present the matter related to KE’s generation enhancement plan to the CCOE, which should focus on reducing the cost of electricity as well as on the resultant subsidies.

The queries said to have focused around KE’s generation capability, past additions and future generation plan. Power Division demonstrated through data that continuing supply of 1,000 MW from NTDC to KE will reduce the government burden of subsidy being given to Karachi.

Official document revealed that the Power Division supported the recommendations of the Task Force and the Committee constituted for due diligence on Indicative Generation Plan, PPAA, ICA, TDS, and Mediation Agreements have been agreed upon and initialed by the parties, after detailed negotiations, based on principles set out by the task force.

Approval of these agreements will resolve long pending issues between KE and GoP entities and regular payment will be streamlined by all the parties to avoid any addition in circular debt.

The minister requested the ECC to approve; (a) the draft PPAA, ICA, RDS, and mediation agreements and authorise respective entities to signed initialed agreement draft agreements; (b) assign by one division (Power or Finance to sign the TDS agreement on behalf of the government.

The meeting was attended by the Minister for Communication, Railways and Maritime Affairs Shahid Ashraf Tarar, the Minister for Privatization Fawad Hasan Fawad, the Minister for Power and Petroleum Muhammad Ali, Advisor to PM on Finance Dr Waqar Masood, federal secretaries, and other senior government officials of the relevant ministries.

Copyright Business Recorder, 2023