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ISLAMABAD: Although, the Task Force on Energy has terminated or amended agreements with 13 IPPs, (five thermals, eight baggasse), talks with the remaining 18 IPPs of 1994 and 2002 are not heading towards a resolution as both sides are challenging each other’s figures, well-informed sources told Business Recorder.

The Task Force headed by Minister for Power, Sardar Awais Khan Leghari comprising, SAPM on Power, Muhammad Ali and National Coordinator, Lt. General, Muhammad Zafar Iqbal, Chairman NEPRA and Chief Executive Officer, CPPA-G is engaged with the IPPs with the support of experts from NEPRA, CPPA-G, PPIB and SECP.

IPPs, which are being called individually are appearing before the Task Force, are represented by their Chief Executive Officers, Chief Financial Officers (CFOs) and legal counsels. However, the IPP teams are complaining of harsh treatment when they challenge the statistics of government ‘experts’.

Negotiations with IPPs: Nepra voices concerns about ‘key’ factors

Two members of NEPRA, (Member Law and Member Technical) the power sector Regulator, have expressed concerns on the way investors are being treated. The sources said, IPPs are asking for termination of their contracts instead of conversion from take or pay to take and pay mode, saying that they are not potato and grams carts. Some of the IPPs have also refused to sign the revised pacts blindly.

The Task Force which had started talks with over two dozen IPPs is expecting to conclude negotiations with the remaining IPPs by the end of the current week. However, some IPPs claim that they have not been invited so far but they have prepared their plans.

According to the PPIB’s website, the individual capacity of each IPP, with whom negotiation are underway are as follows: Uch-I Power Limited of 586 MWs( COD, October 18, 2000) Pakgen Power Limited of 365 MWs (COD, February 1, 1998), Liberty Power Daharki Ltd 235 MWs (COD September 10, 2001), Kohinoor Energy 131 MWs (COD, June 20, 1997), FaujiKabirwala Power Company Limited 157 MWs (COD October 21, 1999), Attock Gen Limited (165 MWs)(COD, March 17, 2009), Engro Power Gen Qadirpur Limited 227 MWs(March 27, 2010), Foundation Power (Daharki) of 185 MWs( COD May 16, 2011), Halmore Power Generation Company 225 MWs (COD June 25, 2011), Liberty Power Tech Limited 200 MWs (COD, January 13, 2011, Hubco Narowal Energy Tech Limited 220 MWs(COD April 22, 2011), Nishat Chunian Power Limited 200 MWs (COD, July 21,2010, Nishat Power Limited 200 MWs (COD, June 9, 2010), Orient Power Company 229 MWs (COD May 24, 2010, Saif Power Limited 229 MWs( COD, April 27, 2010), Saphire Power Limited 225 MW(COD October 5, 2010) the first hydropower project i.e. New Bong Hydel IPP 84 MW of Laraib Energy Limited, (COD, March 03, 2013 and Uch-II Power Project of 404 MWs(COD April 4, 2014).

Key IPPs involved in the new agreement include Pakgen Power, Nishat Power, Nishat Chunian, Sapphire, Hubco Narowal, Kohinoor Energy, Liberty FSD, Halmore, Laraib, and Orient Power.

These IPPs believe that eliminating the entire capacity payment of the 2002 IPPs (2400 MW) would only marginally affect the generation tariff of the ten IPPs established under the 2002 Power Policy. They are prepared to terminate their sovereign contracts, contingent upon the following conditions:

(i) all past due amounts must be paid at termination, either in cash or T-Bills;

(ii) all “Take or Pay” contracts should be terminated to eliminate capacity payments, regardless of ownership;

(iii) generators must be allowed to sell their power to private buyers using the existing transmission and distribution system at a reasonable cost, with no obligation for the government to purchase; and

(iv) SNGPL must continue supplying LNG to IPPs operating on this fuel until private imports are permitted, as LNG supply remains a government monopoly. The government has claimed that it has saved Rs 412 billion from the life of five IPPs by premature termination of their contracts whereas Rs 80-100 billion saving is projected through revision on contracts of 8 baggasse IPPs.

Copyright Business Recorder, 2024

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