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ISLAMABAD: The parleys between Karachi Electric (KE) and Federal Government on resolution of controversial issues are said to have picked up momentum, after the resignation of Special Assistant to the Prime Minister on Power and Petroleum Tabish Gauhar, well informed sources told Business Recorder.

Early this week, a team of KE comprising Chairman KE Board Shan A Ashary and Chief Executive Officer (CEO) Syed Moonis Abdullah Alvi held a meeting with Finance Minister Shaukat Tarin during which all the relevant issues came under discussion.

The Power Division was represented by Additional Secretary/CEO Central Power Purchasing Agency Guaranteed (CPPA-G), Waseem Mukhtar, Additional Secretary (II) Musaddiq Ahmed Khan Tahir Kheli, Additional Secretary (1), CFO CPPA-G Rehan Akhtar whereas Senior Joint Secretary Anwar Sheikh from Finance Ministry assisted Minister of Finance.

"Both sides have agreed to resolve and close issues related to Power Purchase Agreement (PPA) and National Transmission and Despatch Company (NTDC) one by one within a few days," the sources added.

KE’s results belie enormity of power sector challenges

However, those issues that remain unresolved will be placed before the competent forum i.e. either Cabinet Committee on Energy (CCoE) headed by Minister for Planning, Development and Special Initiatives, Asad Umar or the Economic Coordination Committee (ECC) of the Cabinet under the chairmanship of Minister of Finance for their nod, the sources continued.

The key issue between the government and KE is related to base load. KE argues that it cannot formulate its future generation plan until the government gives it independence in generation and continuously sells power from national grid to KE.

"This issue is expected to land at the highest level as the government wants to sell its own surplus power to KE," the sources maintained. The issue of Standby Letter of Credit (SBLC) will be resolved with the help of Finance Minister Shaukat Tarin who has promised to convene a meeting of banks for a move forward.

Another issue is that of indemnity between NTDC and KE. NDTC maintains that there should be indemnity in the PPA agreement but KE wants the same condition for it.

The sources said the government was also trying to make it mandatory for KE to share its live data with the relevant departments/organisations. However, KE has argued that since no such law exists, there is no need of this condition for the time being. The power utility says that when this will become law then it will consider it.

‘Pending’ claims: KE urges govt to release Rs180bn

The sources said when the PPA was finalised, KE and the government would hold a meeting on Terms of Reference (ToRs) to resolve dispute on receivables and payables. Both KE and Federal Government and its allied departments claim outstanding payables and receivables of Rs 300 billion each.

"When issues related to PPA and ToRs are resolved amicably then the issuance of National Security Certificate (NSC) will be an issue," the sources said. The issue of NSC is necessary to sell 66.40 percent shares of M/s Abraaj Capital to Chinese company M/s Shanghai Power which recently renewed its intention to purchase 66.40 percent shares of Abraaj in KE.

Insiders claim that a feeling of positivity was evident in officials of Power Division and Finance after the departure of SAPM on Power and Petroleum, Tabish Gauhar. However, his close friend, Naveed Ismail, who is representing NTDC on the KE Board, may still create hurdles.

Copyright Business Recorder, 2021

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