ISLAMABAD: State Bank of Pakistan (SBP) has expedited approvals of pending foreign payment applications after Private Power & Infrastructure Board (PPIB) raised this issue at a higher level, well informed sources told Business Recorder.
Chinese company Huaneng Shandong Ruyi (HSR-Pakistan) in its letter of January 31, 2022 informed the PPIB that significant delays were occurring in getting approval from State Bank of Pakistan for foreign payments to coal suppliers due to which coal shipments were pending for clearance at port.
Accordingly, PPIB, in order to resolve the matter, wrote letters from time to time as per the request of the Company to the SBP - on October 15, 2021, December 9, 2021 and February 1, 2022 wherein the PPIB requested the SBP to process the requisite payment applications submitted by the Company in timely manner.
Further, the PPIB also requested the central bank to ensure processing of payments of two shipments of coal on a weekly basis in future so that stability of coal supply and hence stable operations of the power plant may be ensured, failing which the Company would be unable to produce electricity due to the absence of coal stock as required to be maintained under the PPA.
Additionally, due to urgency of the matter, MD PPIB personally intervened and requested higher officials of the SBP through telephone to resolve the issue on urgent basis to avoid interruption in smooth operations of power plant and serious implications of unnecessary litigation with Government of Pakistan (GOP) and any cost damage to the company.
The PPIB informed Power Division that the representative of the company through telephone has confirmed that the SBP has approved the pending foreign payment applications and almost all of its shipments have been cleared from Customs. Moreover, the company has also confirmed that the SBP is now processing the foreign payments applications on timely basis.
The company in its letter had stated that due to delay in processing of payment applications it was under considerable pressure to ensure adequate and uninterrupted coal supply to meet power requirements of the national grid and at the same time avoid impact of rupee devaluation.
In this regard, the Company informed that since the fourth quarter of 2021, the State Bank of Pakistan has increased foreign exchange regulations with an increase in processing time for payment approvals which have a penalizing impact on cost of shipments and on ensuring adequate coal supply and plant operations. In this regard, the Company requested the PPIB’s urgent assistance in coordinating with the State Bank of Pakistan and expedite the approval of foreign exchange payments in respect of coal procurement.
Copyright Business Recorder, 2022
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