ISLAMABAD: National Accountability Bureau (NAB) has reportedly given its approval to the Power Division for clearing the pending dues of Independent Power Producers (IPPs) established under the power policy 2002, in accordance with the revised contracts.
According to sources, the matter was taken before Prime Minister Imran Khan during the federal cabinet’s meeting held on June 22 whereas Cabinet members voiced their favour of clearing the dues.
An official of the Power Division on condition of anonymity confirmed the info, adding that following NAB’s permission, the Power Division is likely to present a fresh summary in the upcoming meeting of the ECC to seek approval in light of NAB’s decision.
Sources said that ECC had earlier deferred its decision to make payment; however, NAB has now informed the Power Division that it may conduct the payment procedure to IPPs of 2002 Power Policy 2002 in accordance with the revised contracts.
“Next ECC meeting will take up the matter as NAB has now granted its permission to the power division to clear dues of the IPPs established under power Policy 2002 in accordance with the revised contracts, ” said the sources.
According to revised contracts, reduced tariff will be applicable from the date of payment after the payment of the first installation. Similarly, an increase in late payment charges on their undisputed payables will be stopped, which will lead to a reduction in circular debt.
Furthermore, a heat rate test will be conducted as the said IPPs have already agreed that the government can determine heat rate test to find out actuarial while these revised contracts will save the government approximately Rs180 billion or more.
Sources also said that NAB has been investigating the stated savings in the tariff component of the IPPs and that the Power Division had asked NAB to examine and validate the process of negotiations and signing of agreements, including the arbitration submission agreement. “The bureau was also asked to notify if they have any issues with the signing of the agreements and payments,” they added.
Moreover, they said that firstly, it was also proposed that the government may withhold payments to all IPPs that have signed agreements pursuant to the MoUs under the Power Policy 2002, until the conclusion of NAB investigations. Secondly, the process of signing the arbitration submission agreement with the IPPs, and notifying them of their revised tariffs as determined by National Electric Power Regulatory Authority (NEPRA), may face suspension until NAB completes investigations.
It is relevant to mention that the government has so far made payments totaling Rs89.2 billion to IPPs excluding those under the Power Policy 2002.
The ECC of the Cabinet on May 5, had approved a summary seeking the approval of Rs89.86 billion for payment of 40pc dues as the first installment to 20 plants as one third cash, one third in a 5-Year Sukuk, and one third in 10-Year PIBs.
The government was to pay the remaining 60pc payment in six months in the same ratios whereas this decision was ratification by the Cabinet on May 18.
