IPPs to receive all dues in two weeks
Government finalising strategy to pay off debt.
The IPPs’ representatives praised the government for its efforts to resolve the payment issue. PHOTO: FILE
LAHORE:
The federal government would finalise a strategy to pay off the debt owed to independent power producers (IPPs) in the next two weeks, said Federal Water and Power Minister Khawaja Muhammad Asif in a meeting with representatives of the IPPs at the ministry on Thursday.
The assurance given by Asif will be a welcome relief in the face of mounting inter-corporate debt in the energy chain that threatens disruption in electricity supply at a time of peak demand.
The circular debt swelled to Rs298 billion early this month with the government struggling to curb prolonged power outages across the country.
Asif stressed that the strategy would be devised in consultation with Finance Minister Ishaq Dar according to the directives of Prime Minister Nawaz Sharif.
He said the government understood the importance of IPPs in easing power shortfall and had been working vigorously to ensure that overdue payments were taken care of.
The IPPs’ representatives praised the government for its efforts to resolve the payment issue and expressed the hope that the strategy would help the present administration to clear the entire circular debt like it did after coming to power in June last year.
In power production, fuel is a major component of the cost. The IPPs operating under the 1994 power policy and generation companies (Gencos) do not pay anything to state-owned fuel suppliers if they are not paid by the government for electricity supply.
However, the IPPs set up under the 2002 power policy cannot do that and they have to either purchase oil by paying cash or stop production.
At the start of May, the government owed Rs141 billion to the IPPs working under the 1994 policy while receivables of the IPPs operating under the 2002 policy stood at Rs59 billion. Total dues of Gencos, Chashma Power and hydroelectric power plants were Rs98 billion.
Published in The Express Tribune, May 30th, 2014.
The federal government would finalise a strategy to pay off the debt owed to independent power producers (IPPs) in the next two weeks, said Federal Water and Power Minister Khawaja Muhammad Asif in a meeting with representatives of the IPPs at the ministry on Thursday.
The assurance given by Asif will be a welcome relief in the face of mounting inter-corporate debt in the energy chain that threatens disruption in electricity supply at a time of peak demand.
The circular debt swelled to Rs298 billion early this month with the government struggling to curb prolonged power outages across the country.
Asif stressed that the strategy would be devised in consultation with Finance Minister Ishaq Dar according to the directives of Prime Minister Nawaz Sharif.
He said the government understood the importance of IPPs in easing power shortfall and had been working vigorously to ensure that overdue payments were taken care of.
The IPPs’ representatives praised the government for its efforts to resolve the payment issue and expressed the hope that the strategy would help the present administration to clear the entire circular debt like it did after coming to power in June last year.
In power production, fuel is a major component of the cost. The IPPs operating under the 1994 power policy and generation companies (Gencos) do not pay anything to state-owned fuel suppliers if they are not paid by the government for electricity supply.
However, the IPPs set up under the 2002 power policy cannot do that and they have to either purchase oil by paying cash or stop production.
At the start of May, the government owed Rs141 billion to the IPPs working under the 1994 policy while receivables of the IPPs operating under the 2002 policy stood at Rs59 billion. Total dues of Gencos, Chashma Power and hydroelectric power plants were Rs98 billion.
Published in The Express Tribune, May 30th, 2014.