SC seeks report on outstanding dues: NTDC calls IPPs’ meeting to resolve issue

RECORDER REPORT

KARACHI: The National Transmission and Despatch Company (NTDC) on the directives of the Supreme Court has called a meeting of eight Independent Power Producers (IPPs) on Monday to resolve their issue of outstanding dues before July 25 so that the government and NTDC may report to the Apex Court.

The agenda of the meeting is (1) to reconcile and examine the accounts of the petitioner IPPs and (2) to explore the possibility of afresh settlement agreement mutually agreed between the parties.

Following a sane advice of the SC in the last hearing to resolve the issue in the best national, public and GoP interest and also to ensure that petitioner IPPs be remain in generation of much needed electricity. The NTDC and GoP promised to come up with a solution on the next hearing to be held on July 25.

The Supreme Court also advised the GoP and NTDC to make due payments to the IPPs.

In the last hearing held on Friday, the Attorney General of Pakistan and the lawyer of NTDC told the bench that the government didn’t have enough money to retire the dues of the IPPs.

It was asked to the GoP and NTDC, “When GoP and NTDC are not able to pay IPPs, how can the generation of electricity be ensured? And secondly how IPPs be made responsible for not generating electricity at their full capacity when they are not being paid?”

The lawyers of GoP and NTDC told the SC about the difficulties being faced in collecting of electricity bills from the public, federal and provincial governments and a number of cases were also in pending in different high courts. On which the bench commented that the collection of bills was responsibility of GoP and NTDC and not of the IPPs.   The court warned the GoP and NTDC of the dire consequences which they might face if the IPPs invoked the international arbitration. In this situation, the IPPs would not be bound to generate electricity and would get full compensation without any consideration of the public miseries.

On the other hand, the council of IPPs told the court that the government was imposing penalties on them for not generating electricity at their full capacities but due to the shortage of funds and non-payment of overdue receivables to them, they were not able to do so.

The court advised GoP and NTDC to come up with the solution to this problem also.

“The court has taken a pragmatic approach by advising NTDC to resolve this matter as soon as possible, and this was the reason we instead of going for international arbitration opted for moving the court,” said a representative of IPPs’ council.

Eight IPPs moved the SC against not receiving their Rs 61.401bn from the government despite invoking the sovereign guarantee which GoP defaulted.

A bench of three judges headed by Justice Tassadaq Hussain Jilani took up the case saying that electricity is the need of everyone and its non-availability hurts the masses and gives rise to unemployment. In the earlier hearings, the IPPs council requested the court to make the settlement agreement dated September 27, the order of the court for interim period, as this settlement agreement was an interim solution agreed between the parties when the same situation arose in 2011. Therefore, it may be extended, said the council.

The petition filed by 8 IPPs highlighted the failure of the government of Pakistan in making timely payments against the power supplied. The petitioners said that the power crisis in the country has worsened as they could not buy fuel to run their units because of huge default of Rs 61.401bn by the government.

This amount includes the capacity payment of Rs 19.379bn, energy payment of Rs 37.846bn, and other payments of Rs 4.176bn. The council of eight IPPs that filed the petition included Liberty Tech, Orient Power, Atlas Power, Nishat Power, Nishat Chunian, Saif Power, Halmore Power, and Sapphire Electric for payment of the outstanding dues of Rs 11.131bn, Rs 4.121bn, Rs 10.478bn, Rs 9.661bn, Rs 10.899bn, Rs 5.722bn, Rs 2.415bn and Rs 6.974bn respectively.