ISLAMABAD: Private Power Infrastructure Board (PPIB) has urged CPPA-G and NTDC to clear outstanding receivables of ±660 Pak Matiari-Lahore Transmission Company (Pvt) Limited (PMLTC) to avert default under the Facility Agreement.
According to Managing Director, PPIB, Shah Jahan Mirza, the organisation on February 22, 2022 received a letter from PMLTC on the pay issue whereby pursuant to Implementation Agreement (IA) and Section 1.5.1 of the GoP Guarantee PMLTC has requested PPIB on behalf of the GoP to provide prioritized support for timely release of its outstanding payment.
PMLTC while highlighting its payment obligations and the progress has stressed that delays in transmission services payment may lead to default under the Facility Agreement of November 9, 2018 entered into between PMLTC and the lender (China Development Bank).
PPIB has also received a letter from Chinese Embassy in Islamabad which has reiterated that PMLTC is obliged to release payments accrued against the loan principal and interest before April 15, 2022. Moreover, it has been requested to take measures to avoid PMLTC from default under the Facility Agreement.
MD PPIB argues that keeping in view the strategic nature of the ±660 KV Matiari Lahore HVDC transmission project and the contractual payment obligations, funds should be released of the payable amount to PMLTC under the TSA, on priority basis.
According to the embassy, ±660 KV Matiari-Lahore High Voltage Direct Current (HVDC) transmission line is the first HVDC line project, as well as the first private sector transmission project in Pakistan upon its commercial operation as inaugurated by Prime Minister Imran Khan, it served as “main artery” of South-North transmission power grid, which has greatly eased the shortage of power supply in the north of the country, and reduced the transmission loss significantly.
“In the worst scenario that PMLTC would default the Facility Agreement, more serious consequences would occur. It is therefore highly anticipated for the esteemed authority, in coordination with relevant authorities, to take imminent measures to avoid the worst scenario and facilitate PMLTC to the largest extent,” said the embassy.
Earlier, the Company’s CEO/ President, Zhang Lei, in a letter to Minister for Energy, Hammad Azhar, copies of which have also been sent to SAPM on CPEC, Khalid Mansoor and other concerned authorities, raised the issue of non-payment of due amount.
Appreciating the authorities, for extending support to the 660 KV HVDC project especially in regard of arranging payment of transmission service CEO of the company has stated that upto now, the company has received the Transmission Service Payment (TSP) for the month of September 2021 to November 2021, and 19.46 percent for December 2021.
However, in accordance with the Transmission Services Agreement (TSA), by beginning of March 2022, the company should receive the TSP from September 2021 to February 2022, along with payment for adjustment of indexation, and TSP for the pre-COD period which remains pending totally amounting to Rs 21.1 billion, the payment received so far is Rs 8.75 billion, which only makes 41.4 percent of the total billed amount.
According to the CEO of the company, in accordance with the facility agreement between PMLTC and the lender (China Development Bank), the former is obliged to release loan principal and interest amounting to $72.2 million before April 15, 2022 without any delay. In addition, PMLTC also needs to meet other obligatory payments to maintain its operations at an amount of $44.2 million including but not limited to Sinosure fee, commercial insurance premium, operation & maintenance cost on timely manner.
“We need to stress again that the total amount of invoices we billed to NTDC is Rs 21.1 billion of which only Rs 8.75 billion has been paid to PMLTC so far,” he said adding that unpaid amount is Rs 12.35 billion.
The company maintains that considering there will be at least three weeks needed to complete approval of foreign exchange conversion from SBP for making payment to the lender, the company needs to receive the remaining amount no later than March 24, 2022, which means there is less than one month left for making the payment. The daily payment of TSP must reach Rs 0.42 billion to avoid PMLTC from default under the Facility Agreement.
Copyright Business Recorder, 2022