MULTAN: An official document reveals the Multan Electric and Power Company (Mepco) made an additional payment of Rs133.88 million to an industrial unit in violation of a contract signed between both parties, Dawn has learnt.

Power distributing companies offered the private sector to generate and supply electricity to distributors and in 2009, the Pakistan Electric Power Company drafted a policy framework for New-Captive Power Producers (N-CPPs) which was endorsed by the federal ministry of water and power.

M/s Roomi Fabrics Limited (RFL) sent a letter to chief operating officer of the Central Power Purchasing Agency (CPPA) and an agreement between the Mepco and RFL was signed for the purchase of 10.5 megawatt.

According to the official document, the Power Acquisition Request (PAR) of Mepco for purchase of electricity from the RFL was submitted to National Energy and Power Regularity Authority (Nepra) and tariff in this regard was determined by Nepra on Jan 27, 2014.

It stated that as per clause (15.30) of the approved PAR, Nepra directed Mepco to adjust payments, if any, made to the RFL from the date of supply of electricity but instead of recovering Rs106 million

It stated that in Mepco, the adjustment of an amount of Rs106 million in excess due to tariff difference from tariff determined by Nepra was required to be recovered but the same was not done.

“Contrary to this, an additional payment of Rs27.88 million vide payment voucher No 106 dated Oct 11, 2017 was made to M/s Roomi Fabrics in violation of the contract clause-D of the PPA,” it stated.

The matter was taken up with the Mepco administration in May 2018 and also was reported to the ministry over which the administration informed that the payment of Rs27.88 million was made in the light of the Lahore High Court Multan Bench’s decision after getting the bang guarantee of Rs83.652 million while there was no mentioning of Rs106 million which were paid in excess due to tariff difference from the tariff determined by Nepra.

Source said Mepco authorities did not take action against the industrial unit despite it stepped back from the court’s direction to resolve the issue by arbitration in the same decision.

A spokesperson for Mepco said the payment was made on the direction of the LHC.

“I am not in a position to comment on the issue anymore as the matter is subjudice,” he added.

Published in Dawn, October 17th, 2020