Eight independent power producers (IPPs) have served another notice to the government on fresh dues of Rs14.79 billion that were overdue on 1st September, swelling their overall dues to Rs45.95 billion. The notice stated that if the payments are not made within 30 days the IPPs will have no choice but to demand call the sovereign guarantee. This fresh notice is the extension of their already served 30-day notice to the government for immediate release of their overdue amount of Rs31.16 billion on 25th August and 10th September.
IPPs stated that PEPCO instead of clearing their dues is intending to penalise the power producers, which is nothing but a move to aggravating the energy crisis further. The nine IPPs are paying the price for threatening to call the sovereign guarantee of the government of Pakistan, sources in the IPPs stated. They said even the normal small payments that are being regularly made to all other IPPs are being denied specifically to them since they have served the notices. The notices were in accordance with the agreements they signed with PEPCO and GOP (under the sovereign guarantee). A few months back four out of these IPPs had even invoked the guarantee after a cold shoulder from PEPCO and then the Government, but invoking of guarantee made the Government realise the situation of default it faced and it arranged payments for these IPPs. It was made clear to both Government and PEPCO that clearance of dues has to be a regular affair as the IPPs under 2002 policy have to buy their own fuel for which they need continuous cash supply, which is assured in the contract between PEPCO and them and guaranteed under Implementation Agreement by GOP.
Never in the last three years have the dues of IPPs been fully cleared, in fact the amounts due kept mounting; forcing the IPPs to take extreme steps, so the government must realize that we are paying a fortune to the banks on the credit that we are forced to take. This is being done as our legally due payments of power supply are not released by PEPCO, he added. The details of the dues of the nine IPPs as available in PEPCO records include Rs7.178 billion to Atlas Power Company that include previous noticed over due amount of Rs4.569 billion on August 25 and Rs2.579 billion power supplied in subsequent month. PEPCO owes Attock Gen Limited Rs9.61 billion (Rs7.76 billion plus Rs1.84 billion. Liberty Power Limited dues were Rs4.186 billion on August 25 plus Rs2.555 billion additional bills after that. Overall dues of Nishat Chunian Power Limited have exceeded Rs6.6 billion, Orient power Limited has to recover overRs3.8 billion, PEPCO owes Nishat Power Limited about Rs6 billion, Sapphire Electric Company Limited dues were more than Rs1.48 billion on August 25 and has not supplied power since then. Halmore Power Limited has to collect over Rs1.2 billion from PEPCO while the total dues of Saif Power Limited exceed Rs3 billion.
The director of one of the IPPs said that it is unfortunate that while being our only client PEPCO defaults on payments and subsequently the Government guarantee has to be called which puts Government in an awkward position internationally. Surprisingly this time around it seems that elements with vested interests have made things worse by advising PEPCO to stop daily payments which will eventually result in the closure of these plants. “Now power suppliers in the power sector has cash requirements to the tune of Rs4-6 billion to run their plants”, said a representative of one of the affected companies. The government has to fulfill its commitment of timely payments to IPPs to ensure uninterrupted power supply from private sector producers, he said. Another affected IPP director said that up till now the affected IPPs were arranging funds from banks to buy fuel for running their generators.
