ISLAMABAD: Saudi company M/s Al-Jomaih has reportedly shared its ordeal with caretaker Prime Minister Anwar-ul-Haq Kakar and caretaker Minister for Power and Petroleum, Muhammad Ali with respect to issues of K-Electric, well-informed sources told Business Recorder.
According to an official statement from Power Division, caretaker Prime Minister, along with caretaker Minister for Power and Petroleum, had a warm and insightful meeting with Sheikh Abdulaziz Hamad Al Jomaih and Shan Abbas Ashary from Al-Jomaih Holding.
The meeting focused on potential investment opportunities in Pakistan, and exploring ways to strengthen economic cooperation and brotherly ties between Pakistan and Saudi Arabia. Both also anticipated a visit to Pakistan, where all parties can further this fruitful dialogue.
In January, 2023, Pakistan had received legal notice from M/s Al-Jomaih Group and the National Industrial Group of Kuwait reportedly on non-payment of outstanding amounts of KE by using OIC platform with an indication that arbitration may be under consideration.
Both Groups, sources said, had sent legal notice to the office of Attorney General of Pakistan (AGP), which, however, suggested to 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 Member 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.
Another issue is between Al-Jomaih and KESC Power over ownerships rights with just 5 per cent share.
The sources said a number of meetings and interactions were held at a high level, including the Prime Minister, to sort out the issues of KE. Most of the issues are near resolution as different pacts have been finalized and ready to be presented before the Federal Cabinet.
Ministry of Finance has suggested that Power Division may sign an agreement on Tariff Differential Subsides (TDS) on behalf of GoP.
Former Prime Minister Shahid Khaqan Abbasi’s led Task Force has already cleared three pacts - Power Purchase Agency Agreement (PPAA), Interconnection Agreement (IA) and Tariff Differential Subsidy Agreement.
Meanwhile, Ministry of Law and Justice held that National Security Certificate (NSC) is obligatory for transfer of shares of K-Electric, which is not just a business entity but a strategic asset of the country and any alteration in its shareholding structure should be subject to a rigorous evaluation process.
Law Ministry maintains that based on discussion of different clauses, it is evident that any modification to the shareholding structure of KESP affecting the ownership of K-Electric’s shares would be deemed an indirect transfer of shares, adding that as previously emphasized, obtaining a National Security Clearance is imperative for any such transfer to be authorized.
The Law Division was of the firm opinion that failure to comply with this requirement would result in the transfer being rendered null and void in accordance with the terms of the SPA.
The sources further quoted Law Division as stating that in emphasizing the critical nature of K-Electric as the sole privatized distribution company and a strategic asset for Pakistan, it is imperative to underscore that any alteration in its shareholding structure should be subjected to meticulous scrutiny. Given its pivotal role in the country’s power distribution, any change in ownership could have far-reaching implications for the nation’s energy security and stability.
In this context, Law Division maintained that it is crucial to reiterate that K-Electric is not just a business entity but a vital component of Pakistan’s infrastructure, and any shift in its ownership must be approached with the utmost caution and consideration for the nation’s well-being. Therefore, any alteration in the shareholding structure should be subject to a rigorous evaluation process, with a focus on safeguarding national interests and maintaining the stability of this crucial strategic asset.
Copyright Business Recorder, 2023