The Pak Matiari-Lahore Transmission Company (PMLTC), a Chinese-owned firm, has lodged a formal complaint against the State Bank of Pakistan (SBP) concerning delays in approving foreign exchange for debt servicing and premium payments to Sinosure, a Chinese export and credit insurance corporation.
According to a news report, during a recent discussion with Power Minister Sardar Awais Leghari, PMLTC’s President/CEO Zhang Lei highlighted several contractual and operational challenges impacting the high-voltage direct current (HVDC) transmission project.Â
Lei pointed out that the National Transmission & Despatch Company (NTDC) has failed to transfer essential land rights needed for the construction and operation of converter stations in Matiari and Lahore, causing significant project delays.
Moreover, Lei criticised the habitual payment delays by NTDC and the Central Power Purchasing Agency-Guarantee (CPPA-G), noting that payments are typically four to five months late, with only 84.5% of the transmission service payments being received. This shortfall has strained PMLTC’s ability to cover debt servicing and operational costs, severely limiting any potential dividend distributions to shareholders.
PMLTC has repeatedly sought approval from the SBP for necessary foreign exchange allocations to meet its financial obligations under the project’s facility agreement. However, these requests have often been restricted to debt servicing or have remained pending for extended periods.Â
Lei expressed frustration over the inability to secure approval for converting approximately $53 million held in local currency into foreign exchange, which is crucial for fulfilling their debt service reserve account requirements as per the facility agreement with their lender.
This standoff has reportedly led to a potential default risk under the terms of the financing agreement, underscoring the financial and administrative hurdles faced by the PMLTC in executing this critical infrastructure project.
