ISLAMABAD: M/s China Power Hub Generation Company (Private) Limited (CPHGC) has approached Prime Minister Office (PMO) for pending approvals of millions of dollars’ foreign exchange for import of coal.
CPHGC is a company duly incorporated under the Companies Act, 2017, and is operating a 2x650 MW coal fired power project with an integrated jetty in Gadani, Balochistan.
CPHGC entered into the Implementation Agreement (IA) on January 25, 2017 with the Government of Pakistan in connection with the development of the project and signed the Power Purchase Agreement (PPA) with Central Power Purchasing Agency (CPPA) on January 25, 2015.
In a letter to Secretary to Prime Minister, the company’s Chief Financial Officer (CFO) noted that as an imported fuel project under the CPEC framework the project is committed to making various foreign currency payments including the lenders’ payment, fuel supplier payments, O&M contractor payments, insurance premiums, spare parts, etc. For this the company is required to obtain foreign currency from the commercial banking channel; however, due to the current volatile foreign exchange situation in Pakistan commercial banks, most of the time, are reluctant to remit foreign currency within the payment deadlines due to state Bank of Pakistan (SBP) approval procedures.
According to the company, detailed letters were shared with the relevant authorities at different time intervals and the same matter was also highlighted by CPHGC in the 1st meeting of Standing Committee on IPPs held on October 17, 2022.
During the meeting, CPHGC was assured that the Power Division will take up this matter with Finance Division and State Bank of Pakistan to resolve this issue of pending payments at the earliest.
However, the company’s payments remain pending till date and once again it has requested Power Division to intervene in the matter and take measures to curb ongoing foreign exchange liquidity crisis for IPPs which would enable it to operate on optimal financial efficiency without any default.
“The current state of affairs is certainly beyond our control as is evident from our alarming receivable position. We have already stretched our resources to the maximum and are now dependent on relevant authorities to intervene and resolve the matter amicably,” said CFO of the company.
Copyright Business Recorder, 2022