ISLAMABAD: An aide to the Prime Minister is reportedly forcing Private Power Infrastructure Board (PPIB) to extend unflinching support to a coal-fired project of Siddique Sons Limited (SEL), well-informed sources told Business Recorder.
Sharing details, sources said that a follow-up meeting was held in the PM’s Office on September 22, 2022, under the chairmanship of Dr. Jehanzeb Khan (SAPM-Government Effectiveness) to review the issues of 310 MW Siddique Sons Coal Power Plant being established in Thar-Sindh by Siddique Energy Limited (SEL). The meeting was attended by senior representatives from the Power Division, PPIB and CPPA-G in person while legal representative of PPIB and MD NTDC attended via a Zoom link.
The sources said, PPIB apprised that SEL was granted final (10th) extension of Letter of Support (LoS) up to December 31, 2021, in 134th meeting of the PPIB Board. However, due to non-compliance with the requirements of LoS, PPIB confiscated the Performance Guarantee (PG) of the project in June 2022.
The NTDC stated that SEL is required to pay liquidated damages to the tune of $ 13 million (amount equivalent to Transmission Service Charge) as capacity payments to the Pak Matiari-Lahore Transmission Company Limited which achieved CoD in September 2021, the sources added.
The CCPA-G stated that LDs claimed by NTDC have to be viewed in context of termination of LoS. Financial close has yet to be achieved.
SAPM highlighted that the Government committed to supporting investment in the country. Karachi’s infrastructure development and power needs also require federal support. The 330 MW Siddique Sons Coal Power Plant could not achieve financial close (due to mounting circular debt as informed by the sponsors). The lenders are willing to finance the project if K-Electric is the buyer. Since the sponsor and the buyer are both private entities, the project doesn’t fall within the purview of Power Policy. The supply of electricity would, require wheeling through NTDC’s transmission system. Hence, the support is being sought from GoP to facilitate this Business 2 Business arrangement to meet the base load needs of Karachi. After detailed review of the various issues and challenges the meeting was of the view that since PPIB has confiscated the PG of SEL, formal termination of LoS is awaited, Power Division/PPIB will examine the project in a broader national framework in consultation with the sponsors in two weeks.
The meeting also decided that NTDC will firm up its view on the Liquidated Damages (LDs). Furthermore, NTDC will ascertain the various requirements and of interconnection and wheeling of the project for provision of electricity to K-Electric in two weeks’ time.
On the issue of Liquidated Damages, the meeting decided that CPPA-G would respond to the communication made by NTDC in June 2022.
Copyright Business Recorder, 2022