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ISLAMABAD: Water and Power Development Authority’s (Wapda) receivables stock has reached Rs 232.644 billion due to insufficient payments by Central Power Purchasing Agency –Guaranteed (CPPA-G), well informed sources in Wapda told Business Recorder.

According to Member Finance Wapda, on March 31, 2023 Wapda, in compliance with ECC decision of November 29, 2022, received Rs.22.242 billion through Pakistan Investment Bonds (PIBs).

“This release has been made against our long outstanding energy receivables whereas CPPA-G only paid Rs 2 billion in cash for the month of March 2023. This is far less than our bare minimum monthly demand of Rs.7.50 billion. CPPA-G also did not release separate funds for making payments to provinces on account of Net Hydel Profit (NHP),” the sources quoted Member Finance as conveying to Secretary Ministry of Water Resources.

Payables, NHP: Wapda urges PD to pay Rs100bn

The present stock of receivables is Rs232.644 billion of which energy receivables stood at Rs 27.537 billion, pending debt servicing liability towards the GoP Rs 115.793 billion and Net Hydel Profit payable to provinces (GoKPK Rs 22.315 billion and GoPb Rs 67 billion).

According to Member Finance, Wapda is developing mega projects of strategic national importance including Dasu, Mohmand and Diamer Basha, Tarbela 5th Ext and Karachi Water Supply Scheme K-IV. Currently Wapda is facing serious financial crunch due to insufficient PSDP releases by the GoP, which has put an extra financing requirement through equity injection. Any delay in contractual payments exposes Wapda to LD claims.

This underscores the need to receive monthly energy sale invoice payments on a timely basis. Wapda has been constantly requesting CPPA-G to release funds equivalent to its bare minimum monthly requirement of Rs.7.50 billion which is quintessential to meeting Wapda’s equity injection, O&M and debt servicing requirements.

Wapda maintains that in fact even in the last settlement on Dec 2022 of Wapda’s long-outstanding receivables of Rs 11 billion, CPPA-G only paid Rs 1.0 billion against its monthly invoices that increased the stock of outstanding receivables.

Wapda is constantly pursuing CPPA-G to clear hydroelectric receivables and de-link it from circular debt as it has not claimed any LDs for later payments covered under Power Purchase Agreement (PPA) till date. Wapda maintains that its tariff is already the lowest in the overall generation basket of the country @ Rs 3.37 per unit and only recovers cost of service with no funding mechanism/ indexation to meet its working capital needs which necessitates payments to be made to Wapda as defined under ESCROW account mechanism, i.e., up till 25th of the following month.

After explaining the background of the issue, Member Finance Wapda once again requested to instruct CPPA-G to ensure payment of monthly bare minimum needs of Rs.7.50 billion to Wapda besides clearing hydroelectric receivables of Rs.232.644 billion at the earliest enabling Wapda to meet its operation and development needs.

Copyright Business Recorder, 2023

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Tulukan Mairandi Apr 20, 2023 11:06am
But in other news our dear PM is ordering payments for this and for that like as though the money is growing on a tree.
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