LAHORE: The talks between the government and the Independent Power Producers Advisory Council (IPPAC) on unpaid bills of 13 private power producers, which have already called their sovereign guarantees of Rs48 billion, collapsed on Friday after the Ministry of Water and Power cancelled meeting with the council officials at the eleventh hour.
The ministry called off the meeting citing an advertisement published by the private producers in the newspapers on Thursday to announce that they had extended the deadline for calling the sovereign guarantees by 10 days till March 26 to allow the government to settle the issue of payment of their unpaid bills – commonly known as circular debt.
The power companies had been invited for a meeting by the Private Power Infrastructure Board (PPIB) last week after they issued final notice for calling sovereign guarantees on March 2.
The government had sought two days from the private power producers for another meeting to find resolution to the various pending issues including the payment of unpaid bills to avert a sovereign default. The second meeting was scheduled for yesterday (Friday) in Islamabad but was cancelled late on Thursday night.
“The ministry wrongly believes that our media campaign is aimed to damage the country’s reputation. But we had started to take out advertisements because the ministry high-ups were not listening to us,” contended chief executive officer of a power producer while speaking to Dawn.
“We extended the payment deadline for 10 days as a goodwill gesture after we were assured that a solution would be found at the next meeting. We gave the government time to arrange the money for making our payment. But it had instead called off talks.”
The IPPs had called sovereign guarantees after the failure of the National Transmission and Despatch Company (NTDC) and the government to pay the overdue amount even after the passing of 30 days. The government, under the sovereign guarantee, has to pay the due amount within 10 days from the date of submission of final notice.
The producers that have served final notices include: Lal Pir Power (Rs4.552bn), Pakgen Power (Rs7.778bn), Kohinoor Energy (Rs2.306bn), Liberty Power (Rs5.361bn), Nishat Power (Rs4.881bn), Attock Gen Ltd (Rs4.449bn), Atlas Power (Rs4.555bn), Nishat Chunian Power (Rs4.16bn), Hubco Narowal (Rs5.024bn), Saif Power (Rs1.503bn), Sapphire Electric (Rs1.396bn), Orient Power (Rs1.18bn) and Halmore Power GCL (Rs880mn).
This is the fourth time that the IPPs have initiated process to invoke their sovereign guarantees for the recovery of their unpaid bills.
According to the IPPAC, the unpaid bills of the power sector, including GENCOs, had soared to Rs414bn by mid February in little over three and a half years since the government cleared the previous stock of Rs480bn in June 2013.
The IPPs want the government to come up with an acceptable plan for clearing their bills and bind the NTDC and CPPA to stop violating their contractual provisions.
Published in Dawn, March 18th, 2017