IPP on the brink of default as Rs600b remains outstanding

Islamabad – The Independent Power Producers (IPPs) on Sunday have said that they are at the brink of default as the government has not paid them for years and owes an amount of approximately Rs. 600 billion to the power producers.

In response to the recent reports appearing in media on the Inquiry Committee’s Report over alleged losses of around Rs 100 billion in the Power Sector, the Independent Power Producers Advisory Council (IPPAC) categorically rejected the allegations being attributed to such report.

The spokesperson for the Indpendent Power Producers said that neither the IPPAC nor any IPP was consulted or approached by the inquiry committee for the preparation of the report or its contents.He said that the reports appearing in the media made unsubstantiated allegations against the Independent Power Producers (IPPs), accusing them of having unfair agreements, and misappropriation in tariff and fuel consumption rates.

He said the allegations being levelled on the IPPs were ill-conceived, unfounded, baseless and disappointing, which was causing serious damage to the reputation of IPPs.

he said that the IPPs had given their sweat and blood for the development of Pakistan at a time when no one was willing to invest in the country. He said that the IPPs had empowered an uncertain economy, which had not witnessed such a sizeable quantum of Foreign Direct Investment ever in the past.

“While the Government has not paid the IPPs for years, and IPPs are at the brink of default being owed an amount of approximately Rs. 600 Billion, they still continue to remain available to provide uninterrupted supply of electricity for the country, always keeping the greater national interest at the forefront” the spokesperson said.

Previously, nine IPPs had already given a lot of relaxations to the Government in the form of a Settlement Agreement, keeping in mind the national interest. Yet it was the Government that has been unable to obtain formal approval(s) to implement the same; hence that opportunity has been lost. The Settlement Agreement was consented to by such IPPs that had won the Arbitral Award by the London Court of International Arbitration (LCIA) in 2017 for the recovery of unpaid capacity payments, which had been deducted in contravention of legally valid and binding Power Purchase Agreements.

He said, “Similar witch-hunting exercises in the past have caused immense damage to the investment climate and economic prospects of the country, and if we do not learn from the past mistakes, it will again lead to the same negative results. The IPPs have always remained available to engage in a meaningful dialogue with the Government to discuss and find an amicable solution to the most pressing needs of the country. In the prevalent conditions, given the COVID-19 Pandemic, the IPPAC and IPPs stand ready to do their part to help the Pakistan economy during this time of need, in addition to providing uninterrupted power supply to people of Pakistan.”

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *