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Payments to IPPs

January 13, 2019

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THE matter of hefty billings claimed by some Independent Power Producers from the government has been under discussion at various forums for quite a long time. Some quarters think that such huge claims are unjustified and a burden on the national economy and contribute to the spiralling circular debt.

There is no doubt that these claims by the contractors (IPPs) are ultimately telling upon the financial health of the government as these have to be paid under the contracts.

Once a contract has been signed by the two parties, the power purchaser and the supplier, it becomes a governing document for the tenure of the contract and binding upon both the parties.

To make hue and cry afterwards is meaningless and not helpful. The payment clauses if challenged in a court of law are likely not maintainable.

The power purchasing agency should have thoroughly examined the pros and cons of the relevant clauses of the proposed draft contract (s) before signing.

Now they can only face the music, or as the Americans say: grin and bear it.

Engr Riaz Bhutta

Lahore

Published in Dawn, January 13th, 2019