ISLAMABAD: Independent Power Producers (IPPs) will certainly move London arbitration under contractual right if the government reviews Power Purchase Agreements (PPAs) unilaterally.
“Last time the IPPs won the case in London arbitration. However, the said issue is being settled with willingness of the government as this country is ours,” said Khalid Mansoor, CEO Hubco and executive member of IPPAC Independent Power Producers Advisory Council), when asked if government goes for review of PPAs, then what the IPPs will do.
“However, we will go by the book by invoking the dispute mechanism clause enshrined in the agreements and more importantly the government has extended the sovereign guarantees in the agreements,” he said.
Flanked by CEOs of many other IPPs, he interacted with media persons Monday and gave counter narrative against the propaganda that IPPs are mopping up the windfall profits and they are responsible for the unaffordable tariff in Pakistan. He asserted that their counter narrative is based on facts according to which power generation houses are not making huge profits rather the situation is otherwise.
During the question-answer session, Khalid Mansoor said that the IPPs’ representatives were on Monday summoned by Inquiry Commission on Debt wherein he told the 15-16 member commission about the case of IPPs. When asked as to how commission on debt can summon IPPs as they have no role in piling up the debts of the country, Khalid Mansoor said he is also clueless. However, he said, the IPPs are ready to explain their case at every forum and would be ready to be part of any kind of investigation at any level. Asked when the investigation against IPPs is being carried out by the NAB, Nepra and more importantly, court of law is also active on the issue, then why the commission on debt has summoned IPPs, he said he has no answers.
When pressed if the government is hell bent upon on arm-twisting of IPPs, he again said at this moment he cannot say that. Khalid Mansoor said the inquiry commission has asked the IPPs to provide details about the proceedings from petition in Nepra till review of the petition and yearly profit from CoD to until now. The commission also asked for return on equity allowed in tariff and the actual tariff.
“We will submit all the details required by debt commission very soon,” he said.
He also mentioned that the commission will constitute international panel of experts to look into the IPPs issues. Khalid Mansoor said the IPPs will love to go to the Senate Committee on Power for pleading their case and even they will go up the level of prime minister with an aim to brush aside propaganda that IPPs are making windfall profits.
To another question, he said the government owes Rs370 billion to 22 IPPs and as far as Hubco is concerned the overdue amount from the government stands at Rs76 billion, whereas total dues are at Rs85-86 billion.
When asked as to why the IPPs are evasive from getting done the heat rate audits of their respective plants, he said the IPPs are ready though the power policy is silent about this issue. He said the IPPs offered the government that they are ready for heat rate audit, but after it is done, the CPPA should enforce the heat rate on actual basis. However, he said, it is the government which refused to apply heat rate on actual basis.
Mentioning the Senate Committee on Power meetings where in it was calculated that the IPPs are making 61 percent profits, he said it factually carries to weight. He said that the IPP model has been critical in attracting the necessary foreign and local investment required to alleviate power crisis in Pakistan. He said the Senate has declared accounting profit of IPPs which is 61 percent. He said it is not true as in this profit there are many heads such as insurance, debt and its servicing goes to lenders and insurance companies. However, he said, 15 percent profit is with IPPs.