Port Qasim Electric Power Company (PQEPC) has warned the government that it may suspend operations at its coal-fired power plant if outstanding payments of Rs 93.5 billion are not settled promptly.
Business Recorder reported that the delay in payments, which has surpassed the agreed deadline, has left PQEPC unable to remit dividends to its shareholders, which could escalate further without immediate intervention.
The outstanding receivables for coal-fired plants developed under the China-Pakistan Economic Corridor (CPEC) now total around Rs 300 billion, over a billion dollars. This backlog remains a significant issue for both Pakistani and Chinese authorities, hindering the approval of new loans and insurance for ongoing and future projects.
In a letter to the government, PQEPC’s CEO Wang Dongfang highlighted that the Port Qasim Coal-fired Power Project, a key energy project under CPEC, has consistently provided reliable electricity to the national grid and played a crucial role in controlling circular debt throughout the COVID-19 pandemic.
However, as of February 26, 2025, the total payment due for the project had reached Rs 93.5 billion (around $334 million), with a delay of over six months.
The plant’s shareholders, including parties from China and Qatar, have expressed frustration over the prolonged delays and are pushing for immediate action to reduce the outstanding dues.
Wang Dongfang emphasised that the project’s Power Purchase Agreement (PPA) allows PQEPC to suspend operations without incurring Liquidated Damages if payments are not made, further compounding the potential consequences.
The suspension of the Port Qasim plant would lead to a lose-lose scenario for both parties involved, with severe implications for power generation and financial agreements. Therefore, the company has called for urgent settlement of the outstanding amount to prevent defaults in loan agreements and sovereign guarantees.
Sources confirmed that Finance Minister Muhammad Aurangzeb has been approached to assist in facilitating the release of funds to the Central Power Purchasing Agency-Guaranteed (CPPA-G) to address the issue.
Additionally, the Finance Division recently released Rs 18 billion to CPPA-G for subsidies related to the Inter-Disco Tariff Differential for FY 2024-25, including subsidies for agricultural tubewells in Balochistan, Azad Jammu and Kashmir, and the 23rd tranche under the Pakistan Energy Revolving Account.
