ISLAMABAD: The government has approved payment of over Rs 182 billion to clear a part of payment to Government Power Plants (GPPs) of PAEC, Wapda and National Power Parks Management Company Pvt. Limited (NPPMCL) as per payment mechanism already approved for IPPs, well informed sources in Power Division told Business Recorder.
Sharing the details, the sources said the government had, on July 16, 2021, constituted an inter-ministerial Committee to formulate recommendations for cash and non-cash settlement for payment to the IPPs and the Gencos at par with IPPs.
The committee in its meeting held on July 19, 2021 deliberated the matter and agreed that for GPPs, the following payments will be processed initially to clear past liability amounting to Rs 444.5 billion:
(i) settlement/ clearance of Rs 2.834 billion PAEC payables as of November 30, 2020; (ii) settlement/ clearance of Rs 62.731 billion Wapda payables to the extent of Net Hydel Profit (NHP) as of Sept 30, 2021; (iii) Rs 230.01 billion was payable to Wapda as on November 30, 2020; and (iv) settlement/ clearance of Rs 46.9 billion NPPMCL payables as of November 30, 2020 for smooth privatization transaction.
For remaining payment of Rs 262.035 billion (as of November 30, 2020) to Wapda and other GPPs, it was recommended that an exercise may be carried out for cash and non-cash settlement by Power Division, Finance Division and Economic Affairs Division.
The sources said Strategic Plans Division (SPD) through a letter of September 29, 2021 approached Power Division, saying that outstanding receivables have increased to Rs 138.76 billion (as of September 24, 2021) and lesser release of payments by CPPA-G may result in shutdown of nuclear power plants. Similarly, Privatization Commission also highlighted that long outstanding receivables of NPPMCL may impact the sentiments of potential lenders; therefore, payables to NPPMCL may be settled on priority.
According to sources, Power Division maintained that in order to meet immediate requirements of GPPs, there is need for settlement of Rs 182.465 billion to PAEC, Wapda and NPPMCL as per payment mechanism already approved by the Cabinet for IPPs.
Power Division submitted the following proposals: (i) supplementary grant for release of Rs 182.465 billion for payment to PAEC, Wapda and NPPMCL as per payment mechanism already approved for IPPs. This will translate into supplementary grant of Rs 72.986 billion during current financial year and allocation of Rs 109.475 billion in the next financial year; and (ii) for remaining payment of Rs 262.035 billion (as of November 30, 2020) to Wapda and other GPPs, an exercise may be carried out for cash and non-cash settlement by Power Division, Finance Division and Economic Affairs Division in consultation with relevant GPPs.
The sources said that the government has approved Rs 72.986 billion as supplementary grant during current financial year to Power Division in three equal monthly instalments (April, May & June 2022) to be released at the beginning of each month.
It has also been decided that Finance Division ensures budget allocation of Rs 109.475 billion for FY 2023, adding that reconciliation exercise would be completed between Finance Division and Power Division for remaining payment of Rs 262.035 billion for next financial year.
Copyright Business Recorder, 2022