ISLAMABAD: M/s Pak Matiari-Lahore Transmission Company (PMLTC) has shared financial woes with newly appointed Minister for Power, Khurram Dastgir Khan, seeking his help in early resolution of its financial issues with NTDC.
PMLTC is the project Company for 660 kV Matiari-Lahore HVDC Transmission project, which is the only electricity transmission project under CPEC. The project came into commercial operation after its successful achievement of COD on September 1, 2021.
The President/CEO PMLTC, Zhang Lei, in a letter to the Minister for Power has elaborated the case saying that all parties involved in the project have contributed great efforts to the project in the course of development and construction of operation; and a constructive and reliable relationship has been built among the parties engaged in the project for its continuing and stable functioning.
“While recognizing the success we have achieved, we must overlook the failures and defaults in the observance of the relevant obligations and liabilities in applicable agreements especially in regard of payment since the beginning of commercial operation of this project, which are most likely to be detrimental and prejudicial to the project operation onwards,” he added.
The company has shared its issues which are as follows: (i) delayed payment of transmission service charges incurred constantly other than occasionally; and (ii) delayed payment of the amounts due and payable for pre-COD period.
According to PMLTC, by end of April 2022, it recovered total Rs.18.67 billion as Transmission Service Charge, which makes only 56.39% of totally invoiced amount. It has become very worrisome as the progress of payment drastically decreased since start of April as there was only Rs. 2.62 billion made to the Company’s account in April, and it became the worst month in terms of receiving payment ever since commercial operation of this project.
In accordance with the Transmission Services Agreement, NTDC is allowed to make payment within 1 month after receiving the monthly invoice, however, the actual payment progress has deteriorated to the fact that the company just submitted the monthly invoice of April yet the payment for January is still in progress, which means there is a 3-month delay in payment progress further affecting the Company’s ability to maintain stable operation of this energy backbone of Pakistan’s power grid.
“It is even more worrisome as almost 10 days elapsed in May, unlike other CPEC projects, there has not been any payment made to PMLTC’s account,” said, Zhang Lei President & CEO PMLTC.
The company further stated that by reason of the problems and high risk of economic fluctuation externally, it directly impairs its capability to operate the project stably as a consequence of the following circumstances brought to it: (i) difficulty of cash flow and financial constraints, including timely repayment of principal debt and interest, payment of Sinosure and commercial insurance; (ii) shortage of requisite payment for the O&M of the Convertor Stations and Transmission Lines; and (iii) shortage of requisite cost for the corporate overhead and management disbursement.
“In order to financially reinstate our capability in operating this project, by relieving us from the adverse circumstances, appropriate actions and measures shall be adopted promptly by concerned parties to prioritize our payment for rectification of any defaults,” he concluded.
Copyright Business Recorder, 2022