Rs55bn payment to SECMC: PD not paying heed to PMO’s and MoF’s dispatches

ISLAMABAD: The Power Division is reportedly not paying heed to the Prime Minister’s Office and Finance Ministry on payment of Rs 55 billion to Sindh Engro Coal Mining Company Limited (SECMC), well-informed sources told Business Recorder.

The Prime Minister Office, source said, has sent two dispatches to Power Division along with the letter of caretaker Chief Minister Sindh, Justice Maqbool Baqir (retired) to the caretaker Prime Minister, Anwar ul Haq Kakar for comments but no response has yet been sent back to PMO.

Meanwhile, Finance Ministry has also sent a communication to Power Division along with along with letter of caretaker Chief Minister, Sindh of December 20, 2023, saying that the issue raised in the letter primarily relates to the Power Division/CPPA-G. Hence, Power Division may take appropriate action and directly report on the matter to Prime Minister’s Office, under intimation to Finance Ministry at the earliest.

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SECMC, a joint venture of the Government of Sindh, Engro Energy Limited and its affiliates, is playing a pivotal role in the power sector of Pakistan by providing 7.6 million tons per annum of indigenous Thar coal to three coal power plants, thereby, contributing significantly towards affordable electricity generation.

Since July 2019, because of SECMC supplied coal, approximately, 22,600 GWh of electricity was produced.

As per Merit Order list of National Transmission and Despatch Company (NTDC), it was confirmed that the production is very cost effective.

Despite its significance and contribution, SECMC is facing serious issues pertaining to payments due to circular debt in the energy sector.

This situation has led to the receivables of approximately Rs 55 billion (excluding delayed payment interest invoices) with Independent Power producers (IPPs) through Central Power Purchasing Agency-Guaranteed (CPPA-G) and has adversely impacted on the essential operations of SECMC.

There is well-founded apprehension that delayed payments may pose a risk to Pakistan’s energy security and cause a shift to imported fuel for power generation, incurring an estimated yearly of $ 6 billion (as per average international coal prices).

The SECMC has requested the government of Sindh for support in its contention with relevant Federal Ministries and agencies for timely resolution of the issue.

This disbursement of payments to SECMC is bound to sustain affordable power production in the country.

Caretaker Chief Minister had requested caretaker Prime Minister, Anwar ul Haq Kakar to look into the issue personally and direct all the concerned to process release of payments to the SECMC at the earliest.

Copyright Business Recorder, 2024