CMEC facing difficulties in remitting amount for machinery imports

China Machinery Engineering Corporation (CMEC) said that the company facing difficulties to remit amount to import equipments which would derailed the daily production of coal from25,000 per ton per day, and if not addressed immediately the output might be halted.
In a letter the company addressed the obstacles on remitting the amount to their offshore account.
The company remitted $22 million overdue receivables to CMC offshore Account between April and July this year, despite an extreme shortage of foreign exchange reserves in Pakistan.
However, since June, the monthly remittance of offshore overdue receivables from SECMC has decreased substantially.
In June, remitted $3.7 million which was far from the expected payment of $10 million per month.
In July, only $3.4 million was sent, and in August, the payment of offshore overdue receivables dropped to 0.
According to statistics, as of the end of July, the “overdue receivable” rebounded to $50 million.
At present, there are only 4 months left in the contract period of Thar Coal Mine Project, and there will be about $30 million in offshore and onshore milestone payments in the next few months.
How to reduce and clear “overdue receivable” during the contract period has become the most important problem to solve for SECMC and CMEC.
At present, the CMEC Thar Coal Mine Project has encountered unprecedented major financial difficulties.
The huge arrears caused a serious shortage of fund chain, and a large amount of service fees and parts & accessories expenses that owe to subcontractors.
Due to the shortage of spare parts, a large number of equipment has been malfunctioning or even shutting down for a long time.
The Thar Coal Mine has been in an imbalance state of stripping & mining. Normal coal mining has been seriously hindered, and coal mining tasks have to be reduced to ensure mine operation.
If CMEC site team fails to complete the collection task of “overdue receivable”, they will face strict assessment and will be deducted wages, imposing a severe test of psychological burden and economic pressure.
According to the discussion between the site teams of both, CMC will overcome the huge difficulty of equipment shortage and continue to produce 25,000 tons of coal per day until September 10, during which time SECMC is required to complete the payment approval from relevant bank or government in according with the above Payment schedule and provide confirmation email to CMEC. Otherwise, Thar Coal Mine will have to face large-scale production cuts or even halt.