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ISLAMABAD: The Saudi company M/s Aljomaih Power has reportedly expressed its serious concerns over undue delay in resolution of issues related to K-Electric and nominated Habibullah Khan as its representative for meetings with government functionaries to sort out pending issues.

In a letter to Prime Minister Shehbaz Sharif, Aljomaih Managing Director Abdulaziz Hamad Aljomaih referred to his meetings with him to discuss the long outstanding issues faced by K-Electric and its investment in Pakistan.

Aljomaih appreciated that though the task force headed by former Prime Minister Shahid Khaqan Abbasi is holding meetings and matters are being discussed at length for an amicable solution, however, expeditious closure on certain matters has become even more acute considering it is a question of K-Electric’s survival and sustainability.

Non-payment of dues: PMO seeks update on Al-Jomaih Group’s legal notice

“To explicate our concerns, I would like that one of our key shareholders in K-Electric and Aljomaih Power and founder of one the largest diversified conglomerates in Pakistan, Habibullah Khan, will be meeting Prime Minister at the earliest,” Aljomaih said.

Habibullah Khan will reiterate areas of grave concern which have been discussed but remain pending and resultantly are hurting sustainability and economic viability of K-Electric which is now at alarming levels, ie, pending Gas Supply Agreement (GSA), outstanding Tariff Differential Subsidy (TDS), Mediation Agreement, receivables from entities of GoP, write-off and approval of multi-year tariff 2023.

The sources said Prime Minister’s Principal Secretary, Dr Tauqeer Shah on June 12, conveyed directions of Prime Minister on Aljomaih’s letter saying that the Prime Minister has desired that Finance Minister Ishaq Dar and former Prime Minister, Shahid Khaqan Abbasi, Advisor to the Prime Minister on Establishment Ahad Cheema, SAPM on Government Effectiveness, Jehanzeb Khan and Secretary Power, Rashid Langrial to have an urgent meeting with the representatives of M/s Aljomaih Power. Prime Minister shall take a separate meeting on the issue.

In January 2023, Pakistan had received legal notice from M/s Aljomaih Group of Saudi Arabia and the National Industrial Group of Kuwait reportedly on non-payment of outstanding amounts of Karachi Electric (KE) by using OIC platform with an indication that arbitration maybe sought.

Both Groups, sources said, sent legal notice to the office of Attorney General of Pakistan (AGP), which, however, suggested the concerned authorities to avoid litigation.

The notice had been served for alleged breaches of the Agreement on Promotion, Protection and Guarantee of Investment Agreements Amongst the Members States of the Organization of Islamic Conference (the “OIC Investment Agreement”). The notice suggests initiation of formal legal proceedings against the Federation unless disputes concerning outstanding payments are resolved.

In a subsequent meeting with M/s Aljomaih, Power Division had offered to resolve issues with the request that the latter withdraws the notice. This is still under discussion.

The AGP Office had examined the notice and submitted the following observations: (i) Pakistan is a signatory to the OIC Investment Agreement.

The countries of origin of the claimants are also signatories to the OIC Investment Agreement. Accordingly, the Federation can be litigated against under the OIC Investment Agreement; (ii) The claimants satisfy all legal requirement for issuance of proceedings against Pakistan under the OIC Investment Agreement. Specifically, there are two requirements that must be satisfied before proceedings can be initiated under the said Treaty - first, the claimant must be an investor within the definition of an investor in the Treaty.

Second, the claimant must have made an investment within the definition of an investment in the Treaty; (iii) The claimants are the ultimate and beneficial owners of Aljomaih Power Limited and Denham Investments Limited that collectively own 46% of KES Power that, in turn, owns 66% shareholding of KE.

Accordingly, the claimants fall within the definition of the Investor in the OIC Investment Agreement; and (iv) The claimants have deployed finances and resources in KE and thus satisfy the definition of investment. The OIC agreement does not provide a minimum equity threshold for initiation of arbitral proceedings. The matter is also under litigation in Sindh High Court.

Copyright Business Recorder, 2023

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Tulukan Mairandi Jun 15, 2023 06:32am
They are pissed with Pakistan
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Muhammed Jun 15, 2023 12:32pm
Now RUKH has been brought forward. When & how this conglomerate known as HUBCO became a major shareholder of KE is anybody’s guess. This institution of “Oh I See” is a useless body & needs to be consigned to garbage dump.
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