ISLAMABAD: Minister for Planning, Development and Special Initiatives Ahsan Iqbal has directed the Central Power Purchasing Agency–Guaranteed (CPPA-G) to prepare innovative instrument to make 14 percent overdue payments to Chinese IPPs, well-informed sources told Business Recorder.
He issued these instructions to CPPA-G, the Market Operator, while presiding over a meeting of Joint Cooperation Committee (JCC) of China Pakistan Economic Corridor (CPEC).
The meeting was informed that currently overdue payments to CPEC IPPs stand at Rs 350 billion which is 14 per cent of total amount; whereas 86 per cent of the payments are being regularly made to these IPPs and CPPA-G noted that it is being further improved.
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“Power Division/CPPA-G has been asked to prepare a proposal in collaboration with Finance Division about possible alternative (innovative financing instrument) to make the 14 per cent overdue payments to Chinese IPPs,” the sources added.
Previously, the government’s agencies, sources said, had proposed to clear overdue payments of Chinese IPPs on the pattern of other IPPs but the plan could not get approval due to bureaucratic hurdles.
The meeting was informed that the Chinese side had shared feedback on draft minutes of 11th Joint Cooperation Committee meeting held in October 2022 forwarded for views/ comments by the respective conveners of Joint Working Groups (JWGs). The Minister directed to provide the requisite views/ comments on the draft minutes to CPEC Secretariat at the earliest.
Secretary Communication stated that the Chinese side has invited technical group (Pakistan side) on alternative alignment of RaikotThakot section of KKH to China in April 2023 to finalize the project proposal. Chair directed to convene the 10thJWG meeting on infrastructure prior to the visit to develop consensus on four MoUs- MMM, Babusar Tunnel, No-50 and M-9 - or resolve any pending issue.
Ministry of Foreign Affairs was asked to take up the matter with Chinese side for convening the JWG meeting on infrastructure at the earliest.
The Board of Investment (BoI) briefed on progress of JWG on industrial cooperation and noted that they had shared their feedback on JCC minutes with CPEC secretariat.
Minister for Planning, Development and Special Initiatives reiterated the importance of land allocation in SEZs on lease basis and asked the BoI to furnish concept paper as decided during the progress review meeting held on February 9, 2023.
China Power Hub Generation Company (Private) Limited (CPHGC) has requested CPPA-G to allocate maximum funds to ensure that the company can fulfil its financial obligations and provide uninterrupted power supply to the National Grid and avoid contractual defaults thereof. Recently, China’s Charge d’ Affairs met with SAPM on Coordination, Syed Tariq Fatemi and conveyed concerns of Chinese power companies saying that their overdue receivables have reached $ 1.5 billion.
SAPM on Coordination in a letter to Power Minister, a copy of which is available with Business Recorder, referred to his breakfast meeting with Chinese Charge d’ Affaires, in which the latter stated that overdue payments to the Chinese IPPs currently stand at $1.5 billion. This is causing huge concern among Chinese businesses, he added. Chinese Charge d’ Affaires complained that Chinese power plants at Hub, Sahiwal and Port Qasim are facing currency exchange restrictions, which was causing difficulty in coal import.
Copyright Business Recorder, 2023