Government Goes Ahead With 40% Payment to IPPs
The payment issues between the government and IPPs were resolved in August last year and both parties reached an agreement in November of same year
The long-running dispute between the federal government and independent power producers (IPPs) has been resolved to some extent as the former has approved immediate payment of 40% of long-standing dues.
The Economic Coordination Committee of the Cabinet (ECC) on Wednesday approved Rs 90 billion as the first installment of outstanding payments to 35 IPPs.
The payment issues between the government and IPPs were resolved in August last year and both parties reached an agreement in November of same year.
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However, due to non-alliance with some of the IPPs, the installments were delayed.
Under the agreement, the government was supposed to pay Rs 92 billion to the non-utility generator until March 29.
Instead, the records were handed over to National Accountability Bureau (NAB) for re-verification of the claims by IPPs.
As per clause 5 of the agreement, if the government fails to pay within the stipulated time, the IPPs will suspend the reduced tariff from that date.
However, if the condition is not met within 70 days, IPPs will have the right to terminate the contract after serving a week’s notice.
Sources said the government in an attempt to maintain transparency delayed the payment.
The government will pay 40% of the dues to 35 out of 47 IPPs in form of cash while the remaining 60% would be cleared through Sukuk bonds and T-bills with an equal share of 30%.
Apart from this, NAB is also reviewing the accounts of remaining IPPs and re-verifying their claims.
