ISLAMABAD: Karachi Electric (KE), already disturbed at the undue delay in approvals of proposed agreements on power purchase agreement with CPPA-G and NTDC, is sending its board members to convince officials in Islamabad for early resolution of pending critical issues, well informed sources told Business Recorder.
According to KE, the following issues require immediate resolution for sustainability of power supply in Karachi: (i) settlement of historic dispute around receivables/ payable; (ii) PPA-CPPA-G & NTDC; (iii) write-off claims under Multi-Year Tariff (MYT) pending Nepra determination and;(iv) mid-term review under MYT pending Nepra determination.
On Arbitration Agreement, KE has claimed that this has been thoroughly negotiated by its lawyer Senator Ali Zafar and GOP’s representative Attorney General and legal counsels for PC and SSGC. The power utility argues that settlement of dispute around receivables/ payables is critical for execution of future agreement with SSGCL.
KE maintained that PPA with CPPA-G and NTDC is also critical to provide certainty over continuation of supply from national grid. Drafts have been initialled between KE and public sector parties and await GoP approval.
The sources said, initially, NTDC stated that it has two issues with KE which are yet to be resolved.
When Power Division prepared a summary on the basis of the two issues and sent it to NTDC for comments, the latter raised several other issues due to which the entire exercise became futile.
The sources said, other critical issues requiring immediate resolution for sustainability of power supply to Karachi include write-off claims of Rs 37 billion( FY 2017-2021) under MYT pending Nepra determination.
The power utility said that determination of claims filed in accordance with Nepra approved criteria including 100 per cent verification by auditors remain pending for over two years - which are critical for KE’s sustainability and bank-ability.
Mid-term review under MYT is pending Nepra determination meant to incorporate costs including investments in tariff. The sources claimed that the mechanism in this regard too is pending.
The sources said a delegation of KE comprising Chief Executive Officer (CEO) along with board members will be visiting Islamabad on February 10 -11, 2022 to hold meeting with concerned authorities to seek their support for resolution of critical issues.
The delegation will comprise of Mark Gerard Skelton (Member Board), Nicholas Schwarzmiller (Member Board) Khaqan Saadullah Khan (Member Board) and Syed Moonis Abdullah Alvi (CEO KE).
Copyright Business Recorder, 2022