ISLAMABAD: The Ministry of Energy has notified the constitution of a five-member sub-committee to negotiate with Independent Power Producers (IPPs), asking it to recommend IPPs that could be considered either for retirement or for a detailed forensic audit.
In a notification issued on 3rd June, the Power Division stated, “In pursuance of the Cabinet Committee on Energy’s May 20 decision, a sub-committee has been constituted for negotiations with IPPs. Federal land Composition of Pakistan Chairman Babar Yaqoob Fateh Muhammad will lead the negotiation committee as chairman.”
As per the ToRs for the negotiation committee, the committee would engage with various IPPs to negotiate the amounts, rationale and mechanism of excess payments of the past under specific heads.
The notification further stated that the sub-committee would negotiate with IPPs “the change of rate and formula of their profits, return on investment and Internal Rate of Return from USD basis to PKR basis without any USD indexation.
Similarly, the committee would negotiate with IPPs on modalities and mechanism for shifting from ‘Take or Pay’ contract terms to ‘Take and Pay’ contract terms. Likewise, the committee has been mandated to negotiate with IPPs on any other terms, conditions, payments etc. as the negotiation committee deems appropriate.
“The committee must coordinate with the Power Division (NEPRA, CPPA, NTDC, PPIB, AEDB etc.) for any actions that may be required from these organizations towards achieving the objective of these ToRs,” it added.