PPIB calls power producers to settle payment row

They will meet on March 13 to resolve outstanding bill, other issues


Shahram Haq March 12, 2017
According to the law, the government is bound to pay the amount within 10 days of the submission of final notice. PHOTO: AFP

LAHORE: The Private Power and Infrastructure Board (PPIB) on Saturday called a meeting with independent power producers (IPPs) early next week in a bid to settle outstanding payment and other longstanding issues.

The PPIB invited at least 13 IPPs for a meeting in Islamabad on March 13 after they sent notices recently to invoke sovereign guarantees for blocking billions of rupees in payments.

According to officials aware of the development, the government has so far released only Rs30 billion for 50 power producers against an overdue amount of Rs444 billion.

Of the Rs30 billion, Rs13.44 billion has been given to the 13 IPPs which have invoked sovereign guarantees worth Rs48 billion.

Another 15 power producers established under the 1994 power policy have been provided Rs12.842 billion, though their dues are much higher. Three more power producers operating under the same policy have been paid just Rs3.122 billion.

It showed how the government and Ministry of Water and Power were trying to manage things to avoid sovereign default and handle the mess of circular debt, say power producers.

The final notice was served on March 2 after the National Transmission and Despatch Company failed to clear outstanding bills even 30 days after the initial notice.

According to the law, the government is bound to pay the amount within 10 days of the submission of final notice.

The power producers which have served the final notice include Pakgen Power, which has receivables of Rs7.778 billion, Lalpir Power (Rs4.552 billion) and Kohinoor Energy (Rs2.306 billion). They had been set up under the 1994 power policy.

The power producers set up under the 2002 policy have also sent the final notice. These include Liberty Power (Rs5.361 billion), Hubco Narowal (Rs5.024 billion), Nishat Power (Rs4.881 billion), Atlas Power (Rs4.555 billion), Attock Generation (Rs4.449 billion), Nishat Chunian Power (Rs4.16 billion), Saif Power (Rs1.503 billion), Sapphire Electric (Rs1.396 billion), Orient Power (Rs1.18 billion) and Halmore Power (Rs880 million).

“By making partial payments to the IPPs working under the 2002 policy, the government expects them to withdraw the notice,” an official commented. “No one knows how the IPPs will react.”

Published in The Express Tribune, March 12th, 2017.

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COMMENTS (1)

Fuzail Zubaid Ahmad | 4 years ago | Reply This is about time that the government tells the nation as to why the dues of IPP's haven't been paid. What the public knows is that the Distribution companies purchase the electricity from IPP's and then recover the cost from the power consumers through their electricity bills. Just which part of purchase costs are not being paid by the Distribution companies to the IPP's? Are their any unpaid bills from consumers?
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