ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet has reduced take-or-pay commitment to 33 per cent from 66 percent under the Power Purchase Agreement (PPA) and the GSA of three RLNG power plants in order to protect the interest of both buyers and sellers.
The ECC meeting presided over by Finance Minister Ishaq Dar on Wednesday was tabled a summary by the Petroleum Division on change in the take-or-pay commitment in power purchase agreements and gas supply agreements of three RLNG public sector power plants namely, Quaid-e-Azam Thermal Power Plant, Balloki Power Plant, and Haveli Bahadur Shah Power Plant.
The meeting was informed that on 14th April 2021, the ECC approved to waive of the minimum 66 per cent take-or-pay commitment in the Power Purchase Agreement and Gas Supply Agreement of three public sector RLNG power plants namely, Quaid-e-Azam Thermal Power Plant, Balloki Power Plant, and Haveli Bahadur Shah Power Plant (the Power Projects).
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The related amendments in PPA and GSA could not be given effect which also affected and delayed the privatisation process of National Power Parks Management Company; now the prevailing international economic conditions and the unprecedented price hike of RLNG in the international market has made it expedient that the ECC’s decision dated 14th April 2021 be revisited to optimise the utilisation of RLNG for the continued operations of these power projects.
In the wake of prevailing international economic conditions and the unprecedented price hike of RLNG in the international market and to optimise the utilisation of RLNG for the continued operations of these power plants, the ECC considered and approved the proposal of the Power Division to fix the minimum take-or-pay commitment at 33 per cent under the PPA and GSA to guard the interests of both buyers and suppliers. Further, the ECC allowed the fixation of Gas Supply Deposits (GSD) under the GSA at Rs15 billion per power project.
Copyright Business Recorder, 2023