LAHORE, Nov 23: A meeting between officials of the National Transmission and Distribution Company (NTDC) and executives of a group of eight independent power producers (IPPs) failed to make any headway on a dispute over outstanding dues of Rs31bn.
The NTDC has already given an undertaking to Supreme Court to settle these issues with the IPPs in accordance with the power purchase agreement by or before Nov 30.
"But what transpired at the meeting dashed the hopes of the IPPs," a chief executive officer (CEO) of an IPP told Dawn on condition of anonymity.
"Instead of suggesting some way of resolving the issue, the NTDC officials told us to consider all legal options. This means that the NTDC is least pushed about settling the issues through mutual consultation with the affected IPPs by the expiry of the deadline," he said frustratingly.
The IPPs claim that the government is yet to start "reconciliation of accounts for power supplies made after July 14" and has so far only partially paid Rs5.3bn from the total outstanding dues of Rs37.2bn.
"While the government is continuously defaulting on its sovereign guarantees given to IPPs, we have agreed before the court to defer payment of Rs21bn of the pre July 14 outstanding dues of Rs45bn in view of its financial problems," the CEO said.
This amount will now be disbursed to power producers in monthly installments.
"We have reminded the NTDC of the fast approaching deadline given by the court for settling the issue," he said.
The IPPs say they are suffering due to incompetence of the state-controlled power distribution companies, which have failed to recover outstanding bills of over Rs390bn, half of which are owed by private consumers.
"I don't understand as what is stopping the discos from disconnecting power supply of defaulting consumers and proceeding against them for recovery of bills. The government sector payments could be recovered by the federal government from payments its makes to provinces and budgetary amount allocated for central government departments," said a director of another IPP.
He noted that even after huge tariff increase the circular debt was still increasing.
"A competent management of the public sector power sector can bring down distribution losses from the current 18pc to 4-6pc and reduce cost of power production," he added.
He said transmission losses had been brought down from 10pc to 3pc and this could be achieved in case of distribution losses if the government mustered courage to act against power thieves.