ISLAMABAD: Habibullah Coastal Power Company (HCPC) has reportedly accused the government and National Electric Power Regulatory Authority (Nepra) of damaging the company financially, urging CPPA-G to direct NTDC and QESCO to sever their connections.
In a letter to CEO, CPPA-G, CEO HCPC gave reference to (i) Power Purchase Agreement (PPA) of March 25, 1996 between HCPC and Pakistan Water and Power Development Authority (Wapda), (ii) the Economic Coordination Committee (ECC)of the Federal Cabinet decision of February 27, 2018 regarding waiver of Liquidity Damages (LDs) against non-supply of gas to HCPC, (iii) Novation Agreement of February 27, 2020 between HCPC, WAPDA and Central Power Purchasing Agency-Guarantee) Limited (CPPA-G) and (iv) Implementation Agreement (IA) of March 20, 1996 between HCPC & the President of Pakistan for and on behalf of Pakistan.
HCPC also referred to the interim PPA of February 27, 2020 and Amendment to interim Power Purchase Agreement of August 25, 2020 between HCPC & CPPA-G. The initial term of the PPA was 20 years and later increased to 30 years in Amendment No.1 to the Power Purchase Agreement of April 12, 2002 clause 5.1 & 5.2) subject to the extension of gas allocation. The plant was shut down on October 3, 2019 after the expiry of the Gas Supply Agreement (GSA) with Sui Southern Gas Company Limited (SSGCL).
The CPPA-G board also approved Settlement Agreement and Amendment No.2 to Power Purchase Agreement between HCPC & CPPA-G through resolution of May 18, 2021 and the case was forwarded to Power Division for approval from ECC of the Cabinet. The matter remained in abeyance afterwards.
According to HCPC, nearly two years have passed after the CPPA-G board approval on the proposed Settlement Agreement and amendment number-2 to PPA. HCPC approached relevant quarters through letters, as well as, in person to expedite the matter but to no avail. The company incurred heavy losses in maintaining the status quo over the 44 months. The total cost incurred is to the tune of Rs 850 million. The status quo maintained by the regulator/ government dragged HSPC to the brink of financial collapse which worsened the company’s ability to run the plant as a commercially viable project.
CEO maintains that HCPC Board and sponsors after careful review of the company’s financial condition and prevailing economic condition of the country decided not to pursue Settlement Agreement and operation of the plant. The company will take necessary steps related to its assets in the best interest of the stakeholders. HRSP has requested Chief Executive Officer (CEO), CPPA-G to expedite the settlement of Liquidated Damages under the PPA and release the balance amount, accordingly.
He further requested that NTDC/ QESCO be directed to de-energize and disconnect 132-KV transmission line from interconnection facility at HCPC plant.
Copyright Business Recorder, 2023
Comments
Comments are closed for this article.