ISLAMABAD: Hub Power Company (Hubco) has approached Secretary Power Division, Rashid Langrial, for support for resolution of dispute with Central Power Purchasing Agency-Guaranteed (CPPA-G) on Personal Consumption Expenditure (PCE).
Chief Executive Officer (CEO) Hubco, Kamran Kamal, in his letter to Secretary Power Division, a copy of which has also been sent to Chief Executive Officer (CEO) CPPA-G has shared the background of the case.
In his letter, CEO Hubco said that he has drawn attention of CPPA-G to a dispute whereby the CPPA-G has withheld certain amounts from its Capacity Purchase Price (CPP) invoices in contravention of the terms of PPA amendment agreement of February 11, 2011 entered between Hubco and CPPA-G.
As per the terms of the PPA amendment agreement, until such time that the RKR/ USD exchange rate reaches 168.6, the applicable indexation for the half-year January to June 2021 shall apply on the PCE component of Hubco’s invoices.
Extract clause 3.2 of the PPA amendment agreement are as follows: “for avoidance of doubt until such date, the National Bank of Pakistan TT/OD selling PKR exchange rate reaches PKR 169.60/USD, the USD/ PKR exchange rate and US CPI applicable as per the existing arrangement under PPA for the current half year (i.e., January 2021-June 2021) shall apply”.
Accordingly, Hubco invoiced the PCE component in its CPP invoices for the month of July to September 2021 based on the indexation applicable for the half year January to June 2021.
However, while verifying the invoices, CPPA-G applied the indexation as per the PPA entered into by Hubco and WAPDA in 1992.
This resulted in an amount approximately of Rs 168 million being withheld by CPPA-G.
Copyright Business Recorder, 2022
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