ISLAMABAD: Power Division is said to have paid over Rs 60 billion to 12 IPPs of Power Policy 2002, 40 per cent of total agreed amount as first instalment, well informed sources told Business Recorder.
The following IPPs has been paid 40 per cent of the agreed amount: (i) Atlas Power- RFO; (ii) Attock Gen- RFO;(iii) Engro Energy-gas ;(iv) Saif Power- RLNG ;(v) Halmore Power- RLNG;(vi) Hub Power(Narowal) – RFO ;(vii) Liberty Power- RFO ;(viii) Nishat Power- RFO;(ix) Orient Power- RLNG ;(x) Foundation Power (Dharaki)- gas;(xi) Nishat Chunian and (xii) Saphire Electric –RLNG.
IPPs received 1/3rd in cash, 1/3rd in Sukuk and 1/3rd in PIB bonds on January 6, 2021.
As per revised contracts, with payment of first installation to the 2002 Power Policy IPPs reduced tariff will be applicable from the date of payment, increase in late payment charges will be stopped on their undisputed payables which will lead towards a reduction in circular debt; heat rate test will be conducted as these IPPs agreed that the government can determine heat rate test to find out actual efficiency of plants which will further reduce tariffs after the tests, and fuel saving will be shared with the government besides reduction in operation and maintenance cost varying between 15 and 20 percent. Approximately, Rs 180 billion plus will be the saving of government through these revised contracts.
Initially, the government had approved payment of Rs 52.4 billion as 40 per cent of total agreed amount to 11 IPPs of Power Policy 2002. However, later on the government has also approved payment to Nishat Chunian, but Rs 8.36 billion of Nishat Chunian has been withheld till the final award by the Arbitrator.
Nepra is of the view that it was quite premature to assume that IPPs under the 2002 Policy secured illegal gains as it was yet to be determined by Nepra. The forum was informed that Nepra had not yet determined this aspect vis-à-vis the tariff applicable to 2002 Policy as the matter was subjudice due to stay granted by the Islamabad High Court.
Power Division is of the view that agreements with the 2002 Policy IPPs, finalized by the Implementation Committee, do not provide for deduction of an “illegal” gain made by an IPP and the agreements already inked will need to be reviewed.
In order to review the agreements, the same process needs to followed, which was followed for earlier approval, i.e., negotiation by the Implementation Committee with the IPPs and approval by CCoE before referring the matter to ECC of the Cabinet. The revised contracts with all the IPPs have projected savings of approximately Rs.836 billion for the remaining terms of the contracts. Industry sources told this scribe that the next instalment will be paid in August 2022.
Copyright Business Recorder, 2022