LAHORE: Independent Power Producers overdue payables (IPPs) owed by the government have swelled to Rs205 billion by the end of November.
The energy sector has been plagued by piling circular debt which has been rising exponentially and the energy supply chain in yesteryears has suffered disruptions because of non-payments to IPPs.
Last month, Profit reported regarding the approaching of IPPs to Prime Minister Shahid Khaqan Abbasi for resolving the issue of pending payments and to avert a possible financial meltdown.
Rs195 billion payment was overdue to IPPs by end of October and additional Rs10 billion was added during November, leading to a total tally owed of Rs205 billion.
In a letter addressed to the Prime Minister, IPPs Advisor Council (IPPs) said its financial problems had compounded and copies of it were also sent in mid-November to Federal Minister for Power Division, Awais Ahmad Leghari, Secretary Power Division and Secretary to Prime Minister.
Since its previous correspondence, another letter sent to the relevant authorities read “This (request) is in continuation to our previous letter dated November 15 and as highlighted in the previous letter, the overdue amounts payable to the 20 members of the IPPAC is still outstanding and growing every month.”
“However, the Ministry of Energy has not been able to resolve these issues,” it added. “We would like to again emphasize that many of the IPPs are now so cash-strapped that they cannot timely service their respective financial obligations to their lenders, operators, fuel suppliers and other third parties.”
In September, Profit reported about the London Court of Arbitration’s (LCA) decision to fine Pakistan Rs11 billion partial penalty in a case brought forward by eleven IPPs.
LCA had initially issued a partial penalty due to which expert award became final and binding because of NTDC’s failure to comply with the instructions or move the court within a time span of 75 days.
The fine must be paid to the nine IPPs and will include payment of interest at Kibor of 4.5pc. IPPs responsible for having the brought the case against Pakistan in LCA were: 1) Halmore Power Generation Limited 2) Nishat Chunian Power Limited 3) Hub Power Company 4) Sapphire Electric Company Limited 5) Orient Power Company 6) Atlas Power Limited 7) Liberty Power Tech Limited 8) Nishat Power Limited 9) Saif Power Limited.