ISLAMABAD: The government is likely to strike an out-of-court deal with Star Hydropower Project Limited (SHPL) and National Transmission and Despatch Company (NTDC) regarding 147 MW Patrind hydropower project, well-informed sources told Business Recorder.

Sources said a meeting of the sub-committee, formed pursuant to the Prime Minister’s Office notification on October 4, 2021 concerning the dispute between Star Power and NTDC was held at the Office of the Attorney General on December 2, 2021.

The sources said, it was recalled by the Attorney General Office, that it held a meeting with Hae Dong Choi, Chief Executive Officer (CEO) of the Company on November 3, 2021. After extensive discussions, Attorney General Office was able to persuade the company representatives to halt all arbitral proceedings against the Federation in the present case until December 31, 2021, pending further negotiations on their legitimate claims under the contract.

In this regard, the sub-committee was tasked with reaching a consolidated position and outlining projected solutions pertaining to the dispute, particularly issues of tariff determination and foreign exchange indexation raised by the company in its claim.

Small hydropower projects unable to arrange financing

In the meeting, members of the sub-committee shared their respective institutional positions regarding the way forward in the matter, which are as follows: (i) representatives from the NTDC supported out of court settlement of the dispute provided that the settlement is holistic with the assurance that Star Hydro Power Limited withdraws its claims and pays back the amount paid to it by the NTDC as the result of expert determination; (ii) representatives from the Central Power Purchasing Agency (CPPA)also endorsed out-of-court settlement of the dispute and stressed the need to engage with Nepra as regulator, and the final authority on tariff determination in the matter;(iii) representatives of the Private Power and Infrastructure Board (PPIB) also supported the amicable resolution of the dispute and the engagement of both Nepra and company representatives of SHPL in this regard. The impact of Nepra’s decision on tariff in light of ongoing disputes and its future implications were also brought to light by PPIB; and (iv) Ministry of Energy (Power Division) emphasized the need to ascertain Nepra’s stance with regard to the dispute.

In light of discussions, the sub-committee unanimously approved that all stakeholders strongly endorse out-of-court settlement of the dispute. A meeting comprising of the sub-committee and senior officials and case officers from Nepra would be convened to ascertain their policy view and reach a consensus regarding the way forward.

Following the meeting with Nepra, it was proposed that a meeting comprising of the sub-committee and company representatives of SHPL shall be held, subject to the availability of engagement of an expert that does not fall within the mandate of the subcommittee. Nevertheless, each institution may, if it wishes, obtain independent advice from a technical expert to reach relevant stakeholders.

The members of the sub-committee would also hold regular meetings on a high priority basis, both internally and with representatives of the company to chalk out an amicable way forward.

Copyright Business Recorder, 2021