Germany has raised concerns regarding potentially problematic deals made with Independent Power Producers (IPPs) via the energy task force especially the European nation objected regarding the terms of a deal with M/s Rousch Power Project Limited (RPPL), a power firm linked to Abdul Razak Dawood, a former Minister of Commerce and Industries.
BR reported, citing reliable sources, that Georg Klussmann, the Head of the Division for Pakistan at the German Federal Foreign Office, has voiced concerns through communications with Pakistan’s Embassy in Germany about how negotiations were handled with RPPL, particularly regarding the stake of Siemens in the agreement.
Siemens, a major stakeholder, finds the current terms of the Settlement Agreement unsatisfactory for foreign investors, though it remains open to renegotiating a more acceptable resolution.
In the controversial deal, it was agreed that the RPPL, operating on a Build-Own-Operate-Transfer (BOOT) basis, would ultimately hand over its complex to the Government of Pakistan or an appointed entity for just one US dollar, to be paid in the equivalent amount in Pakistani rupees at the current exchange rate.
Additionally, RPPL is set to receive Rs 5.5 billion as compensation for operational and maintenance expenses due to the premature termination of the agreement, and another Rs 2.8 billion to preserve the complex until the transfer.
The German government has indicated that this protracted issue could potentially cast a shadow over future bilateral relations and affect the confidence of German businesses and investors in engaging with Pakistan.
In light of these concerns, further diplomatic discussions have been proposed to foster an amicable solution and restore trust in Pakistan-German business relations.
