Excess profits of Rs53b by some IPPs: IPPs ask for experts panel led by SC judge

ISLAMABAD: In a new development, as many as six important IPPs have asked the MoU Implementation Committee, headed by Federal Minister for Finance and Revenue Dr Hafeez Shaikh, to constitute an experts panel headed by a Supreme Court judge to look into the charges if they have made excess profit of Rs53 billion.

“They urged the government not to send the issue to Nepra as declared by Mohammad Ali Report," said a senior official who was part of the government negotiations with IPPs on the dues payment mechanism and Master Agreements. "On the alleged excess profit made by them, the IPPs want an experts panel headed by a Supreme Court judge to resolve the issue.”

The IPPs facing blame of minting excess profits of Rs53 billion argued that power plants installed under power policy 2002 have the same power purchase agreements (PPAs) and Nepra had determined their tariffs under the PPAs. “The IPPs are asking how some IPPs made excess profit and others did not. The said six IPPs also argued that in case of such a dispute, the solution lies with the arbitration as per the PPAs, not with the Nepra.”

The total dues that the government has to pay to IPPs stand at Rs452 billion, out of which Rs53 billion is disputed. “The government wants Nepra to carry out due diligence of excess profits. The government argues if it is proven by Nepra that excess profit was made, then the said amount will be deducted from the total dues.

Under the MoUs with IPPs signed in August 12-13, 2020 paving way for discount in tariff worth Rs836 billion in the next 10-12 years, it is mandatory that the government clears the dues of IPPs before signing the amended Power Purchase Agreements (PPAs). The IPPs argued that NEPRA as the regulator is already a party to the dispute on excess payments in court of law as it submitted its version in the court. The IPPs are already fighting the case in the court with promising chances of winning the case.