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ISLAMABAD: The Cabinet Committee on Energy (CCoE) has authorized Power Division to secure alleged excess profits of Rs 8.36 billion from Nishat Chunian Power Limited (NCPL), established under Power Policy 2002, well informed sources told Business Recorder.

The Power Division will also hire the services of Muhammad Ali, as a

Consultant/ Expert to the Federal Government/ MoE in the matter of Arbitration with IPPs under 2002 Policy, the sources added.

The government had approved payment of 40 per cent of total agreed amount to 11 Independent Power Producers (IPPs) of Power Policy 2002, as first instalment of Rs 52.4 billion on September 28, 2021, but the agreed amount is yet to be paid to the IPPs.

These revised contracts were approved by ECC, CCoE and Federal Cabinet during the second week of February 21 after a lot of deliberations and effort.

On payment of first instalment of outstanding undisputed payables to IPPs as per revised contracts, revised terms will be effective and the Government will save billions of rupees every year especially with the worsening rupee-dollar parity and on concessional tariff.

On payment of first instalment to 2002 Power Policy IPPs, reduced tariff of these IPPs of around over 2000 MW will also be applicable. These revised contracts have projected savings of approximately Rs.836 billion for the remaining terms of the contracts.

Post of NTDC MD may go to Power Division officer

On December 2, 2021, Power Division submitted a summary to the CCoE, suggesting more steps to implement its earlier decision with respect to NPCL.

The Power Division proposed the following steps before the CCoE: (i) to approve the report and recommendations by Implementation Committee (IC) for re-negotiation with NCPL, an IPP under 2002 Power Policy; (ii)to authorize Power Division to secure the alleged excess profits of Rs 8.36 billion by way of undertaking from NCPL as amended by Law & Justice Division;(iii) to authorize Power Division to notify the tariff and execute the Arbitration Submission Agreements (ASAs) with NCPL;(iv) to authorize payment of Rs 14.619 billion to NCPL under approved payment mechanism and submit a summary to ECC for supplementary grant in the amount of Rs 14.619 billion;(v) Law & Justice Division may nominate a retired Justice of the Supreme Court of Pakistan as arbitrator;(vi) services of Muhammad Ali may be engaged as a Consultant/ Expert to the Federal Government/ MoE in the matter of Arbitration with IPPs under 2002 Policy, on terms and conditions to be determined as per rules;(vii) Nepra may be directed to nominate an authorized officer to assist and support the Federal Government/ MoE during the Arbitration proceedings;(viii) Law & Justice Division may provide necessary legal support to Federal Government/ MoE including engaging a Legal Counsel for the Arbitration proceedings;(ix) Power Division may seek any support and assistance from other government entities as required during arbitration proceedings; and (x) Ministry of Energy may be designated as the Seat of Arbitration.

During the ensuing discussion, the Minister for Planning, Development and Special Initiatives, Asad Umar, who is also chairman of the CCoE invited comments from the forum which unanimously recommended approving the proposals of Power Division.

Copyright Business Recorder, 2021

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