IPPs call sovereign guarantee to recover outstanding dues worth billions

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Independent Power Producers (IPPs) has called for a sovereign guarantee to recover outstanding Rs48billion dues pending with the government, and Pakistan Power Infrastructure Board (PPIB) has received a notice from IPPs in this regard, it has been learnt reliably.

Sources in IPPs informed Pakistan Today that IPPs has fulfilled all the legal formalities required under the law to recover outstanding dues. They said power producers (IPPs) have called for sovereign guarantee and PPIB has received a notice in this regard. They said National Transmission and Dispatch Company (NTDC) has to pay Rs48 billion to the IPPs which has already been audited. “The government, after calling of the guarantee as per law, has to pay the amount within 10 days,” the sources said.

According to details, the outstanding amount of Pakgen Power is Rs7.77, Liberty Power Rs5.36 bln, HUBCO Narowal Rs5.02 bln, Nishat Power Rs 4.88 bln, Atlas Power and Lalpir Rs4.55 bln. Similarly, the government has to pay Rs4.45bln of Attock Gen, Rs2.3bln of Kohinoor Energy, Halmore Power Rs88 crore, Saif power Rs1.5 bln, Saphire Electrics Rs1.4 bln, and Orient Rs1.18bln.

When contacted, a spokesman of PPIB said, “I don’t know about the clear position and will know on Monday.”

Although Pakistan Muslim League-Nawaz (PML-N) government was applauded for clearing Rs480 billion circular debt when it came to power in 2013, yet it is also leaving behind almost the same amount for the next government.

Ghost of power sector circular debt has resurfaced in the country and is all set to create issues for the power sector and people of the country. People and the entire power sector will bear the heavy brunt of growing circular debt of power sector if the outstanding dues of the power sector are not cleared, which currently stands above Rs439bln. The situation is worsening with each passing day and is exposing the inefficiency of the government towards retiring the outstanding dues of the power sector.

According to details, Kot Addu Power Company Limited is to receive Rs68,177 million, the Hub Power Company Limited is to get Rs64,194 million, Central Power Generation Co Ltd is to receive Rs62,796 million. Northern Power Generation Co Ltd is to get Rs56,747 million, Wapda Hydroelectric is to receive Rs23,853 million, and Jamshoro Power Company Limited is to get Rs18,288 million.

Earlier, some of the IPPs approached the Supreme Court (SC) after the government defaulted in honouring of its guarantee (Sovereign Guarantee) to get the heavy outstanding dues cleared in the past. However, later they (IPPs) agreed to withdraw cases and resolved the dispute through arbitration envisaged under the power-purchase agreements, as part of a deal with the PML-N government for payment of outstanding dues.

Reportedly, the government (PML-N) cleared Rs480 billion circular debt of the energy sector when the circular debt stood at Rs503bn on May 31, 2013.