IPPs extend deadline for clearance of overdue invoices

Ask NTDC, CPPA to follow contracts and stop violating other contractual provisions

ISLAMABAD: The Independent Power Producers (IPPs) have extended deadline to the government for 10 more days for clearing their overdue invoices; otherwise they will invoke their sovereign guarantees.

Earlier, the deadline given by 13 IPPs was due to expire on March 16; however, to give the government further time they have extended it till March 26. According to official details, on February 15, 2017, the total verified and audited amounts overdue to the power sector (Excluding Wapda hydel) stood at Rs414 billion, with share of IPPs being Rs254 billion.

On March 10, 2017, the verified, audited and undisputed overdue amount of IPPs was Rs245 billion. As of today, a Government of Pakistan guarantee call of over Rs35 billion is outstanding.

The IPPs demanded of the government to put forward an acceptable plan for clearing all payables and asked that the National Transmission and Despatch Company (NTDC) and Central Power Purchasing Agency (CPPA) need to follow the contracts and stop violating other contractual provisions.

In the meeting between the representatives of the 13 IPPs and the government held here the power producers have demanded immediate payment of overdue invoices and the payment schedule.

However, the government has demanded two days to sort out the payment mechanism. To resolve the issue of overdue amount the PPIB has invited these IPPs, who have sent notices to invoke sovereign guarantee on non-payment of their dues, for meeting. 

It is pertinent to mention that earlier this month about 13 IPPs, who have overdue amount of around Rs245 billion, have invoked sovereign guarantees and served a final notice to the government.

The IPPs want to recover unpaid overdue invoices of more than Rs48 billion immediately. This is the fourth time that IPPs have initiated process to revoke their sovereign guarantees for recovery of their pending payments.

As per rule, there are 10 days after the notice with the government to clear dues or else the IPPs will have the right to get sovereign guarantees encashment. Out of the total undue amount of Rs414 billion, the government has released Rs30 billion to 50 IPPs and the 13 power producers have just received only Rs13.440 billion against the overdue invoices of worthRs48 billion. 

To review the decision, of invoking the sovereign guarantees, the 13 IPPs have demanded the government to pay at least the overdue invoices immediately.  The IPPs that have served final notices include the IPPs that are established under the 1994 and 2002 power policies and these are Pakgen Power (Rs7.778 billion), Liberty Power (Rs5.361billion), Hubco Narowal (Rs5.024billion), Atlas Power (Rs4.555 billion), Lal Pir Power (Rs4.552billion), Nishat Power (Rs4.881billion), Kohinoor Energy (2.306 billion),Attock Gen Ltd (Rs4.449 billion), Nishat Chunian Power (Rs4.16 billion), Saif Power (Rs1.503billion), Sapphire Electric (Rs1.396billion), Orient Power(Rs1.18billion) and Halmore Power GCL (Rs880 million).