Arbitration pact: Halmore urges govt not to refer ‘excess profit’ issue to tribunal

ISLAMABAD: M/s Halmore Power Generation Company Limited (HPGCL) has requested the federal government not to refer excess profit issue to the tribunal as it has not made any excess profit, sources in CPPA-G told Business Recorder.

The company’s Chief Executive Officer Zaheer Ahmed has written a letter to President of Pakistan through Secretary Power Division, referring to the Master Agreement of February 11, 2021 entered into between 225 MW (gross) Halmore Power Generation Company Limited and Central Power Purchasing Agency-Guarantee Limited or power purchaser pursuant to which the company and the President of Pakistan entered into the Arbitration Submission Agreement of June 15, 2022.

As per the Arbitration Agreement, the GoP and the company agreed to refer the dispute to the tribunal. The dispute is regarding the alleged saving made by the company, which are the excess profits allowed beyond regulatory return.

According to the CEO, HPGCL, in case the company has not earned excess profit beyond the regulatory return allowed then there is no dispute between the company and the GoP and there is need to refer the dispute to the tribunal as per the Arbitration Agreement.

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He further argues that the Annex-E to the Master Agreement clearly provided that “the company did not earn excess profits beyond allowed regulatory return.”

Accordingly, it would be a waste of money and time for the parties to proceed in Arbitration as per the Arbitration Submission Agreement when the company and the power purchaser agreed in Annex-E to the Master Agreement that “the company did not earn excess profits beyond allowed regulatory return”.

After explaining his stance, CEO HPGCL has requested the GoP to confirm that as far as the company is concerned, the matter of excess profit by it does not arise and there is no dispute between the company and the GoP and there is no need to initiate arbitration as per the Arbitration Agreement.

Copyright Business Recorder, 2022