ISLAMABAD: Two Independent Power Producers (IPPs) namely, Attock Gen Ltd (AGL) and Sapphire Electric Company Ltd (SEL) have served payment notices to GoP, which, according to Managing Director, PPIB will have serious consequences for the CPPA-G besides having adverse effect on GoPs guarantee obligations, well informed sources in PPIB told Business Recorder.
PPIB Managing Director in a letter to CEO CPPA-G has stated that pursuant to Section 1.5.1 of the respective guarantees of September 25, 2007 and June 20, 2007 read with Section 16.9 of the respective Power Purchase Agreements (PPAs), Attock Gen Ltd and Sapphire Electric Company Ltd have served separate notices to PPIB on behalf of the GoP stating that the Power Purchaser (CPPA-G) has purportedly failed to make payment of Rs3.862 billion to AGL and Rs928 million to SEL (in total Rs4.790 billion approximately) under the respective PPAs.
Pursuant to the terms of the guarantee, after the expiry of 30 days’ period from the date of such notices, the IPPs may call upon GoP to make payment of such due and payable amounts. In such eventuality, GoP shall then be liable to make payments within 10 days.
According to PPIB Chief Shah Jahan Mirza, the purported payment default under the respective PPAs may have serious consequences for the CPPA-G besides having adverse effect on GoPs guarantee obligations.
He has requested the concerned Ministry to intervene for earliest release of the due and payable amounts to the two IPPs under the respective PPAs.
CEO, Attock Gen Ltd, Adil Khattak, in a letter to the relevant organisations has stated that CPPA-G, the power purchase, has failed to make payment to the company as required from it under the PPA. Consequently, written demand for payment has been served on the power purchaser.
He maintained that Company has called upon the CPPA-G to make payment to the Company of the overdue and unpaid amount of Rs 3,861,802,7401-, along with the interest at delayed payment rate as provided under the applicable provisions of the PPA.
In case this is not made within 35 days following this notice, a Power Purchaser Event of Default in terms of Section 16.2(b) Power Purchaser Event of Default) of the PPA shall occur. This shall be without prejudice to and shall not preclude the Company from exercising other remedies that are provided in the PPA.
Likewise, Shahid Abdullah, CEO, Sapphire Electric Company Limited, in his notice of non-payment by the power purchaser under the guarantee of June 20, 2007 in favour of the company, has also notified that in accordance with Section 1.5.1 of the guarantee, an amount of Rs 928,509,617- is due and payable by the Power Purchaser under the PPA.
According to the letter sent to PPIB, the period available to cure the default is 30 days as prescribed by the PPA. The same cure period of 30 days as is provided to tie Power Purchaser is available to the GOP to cure the default. The cure period will commence upon the delivery of this statement and copy of notice to the GoP.
A source in Power Division told this scribe that payment of 40 percent of agreed amount as first installment to the IPPs of 2002, is expected to be made maximum by January 5 or 6, 2022 (Thursday or Friday) as the payment case has already landed in the AGPR for clearance.
Copyright Business Recorder, 2021