The federal government is facing internal discord over the repatriation of Rs 431 billion owed to Chinese power projects, with the State Bank of Pakistan (SBP) and the Power Division offering conflicting views. The issue came to light during a recent meeting of the Sub-Committee on Reforms, chaired by Minister for Petroleum Ali Pervaiz Malik, as reported by Business Recorder.
The Power Division briefed the committee that Chinese companies, particularly those involved in coal-fired power projects like Port Qasim and Sahiwal, have been awaiting the clearance of payments.Â
Despite previous claims by the SBP that no loan repayments or profit repatriation payments were pending, the Power Division stated that Rs 431 billion remains trapped with commercial banks, primarily related to non-energy components.
The SBP responded, confirming that only a profit payment of $26.5 million is pending with a commercial bank, expected to be cleared shortly. The central bank also denied issuing any instructions to delay payments, but the Power Division pointed to delays in repatriating funds, primarily due to the depreciation of the rupee.
The ongoing discrepancy has raised concerns about transparency in payment flows to Chinese companies and the overall health of Pakistan’s financial system. The SBP was asked to provide a detailed written report on all payments pending with commercial banks, while the Power Division maintained that the payments had not been cleared as per the agreed schedule.
The meeting also focused on the broader issue of Pakistan’s reliance on foreign investment for energy sector development, with discussions touching on the government’s strategic priorities to attract investment in energy and infrastructure projects.
Moreover, the committee discussed the delays in the development of physical infrastructure in Special Economic Zones (SEZs) and Export Processing Zones (EPZs), particularly in relation to attracting Chinese investors. The Board of Investment (BoI) highlighted efforts to streamline processes and improve business facilitation, including regulatory reforms and the introduction of Service Level Agreements (SLAs) for investors in priority zones.
The committee also examined progress in reducing port clearance times, with recommendations to improve governance and expedite logistics processes.
Amid these discussions, concerns were raised over the prolonged vacancy of the Chairman position at the Karachi Port Trust (KPT), with the committee urging immediate action to fill the post.
