Clarification

In respect of the news item titled "IPPs invoke sovereign guarantee notices" reported in the Business Recorder of Friday 20 June 2014, it is clarified that the news item is based on erroneous information false. In this regard, it is pertinent to note that any and all payments that are made to an IPP are made pursuant to the relevant Power Purchase Agreement. Before any such sums are paid, the same are verified by NTDC or WAPDA, as the case may be. This process of verification involves clearance from at least 3 different departments within the organisation. These include National Power Control Center (NPCC), the Technical Section and the Finance Section. Any invoiced amounts that are disputed for any reason are withheld and not paid to the IPP. Accordingly, it is clear that all amounts that are paid to an IPP are duly verified and are sums that are due and also undisputed.
"In this perspective, it is even more important to note that huge sums of money that are undisputed are long overdue on account of persistent payment defaults by the Power Purchaser. Despite any payments being made to the IPPs, huge sums in the range of Rs 200 remain outstanding causing significant liquidity challenges to the IPPs. The outstanding payables are bringing the entire sector to its knees and the individual companies are facing grave issues such as default to the financial institutions and the imminent shutdown of their plants which would significantly increase the load shedding in the country especially in the upcoming month of Ramazan.
It is in this background that the IPPs, left with no choice, were constrained to exercise their legal rights and issued the relevant notices contemplated in their agreements with the Power Purchaser. In the circumstances, issuing of notices cannot be construed as pressure tactics and any such assertion is nothing short of hiding the real facts. "It may additionally be noted that the IPPs are the most modern power generation facilities producing electricity in most efficient manner with minimum consumption of fuel, contributing over 50% of the total power generation to the National Grid of Pakistan."