- The IPPs said the government had already overpaid them.
- Authorities say the IPPs violated their agreement with the government.
- Four IPP owners summoned to meet with members of the working group.
ISLAMABAD: Owners of four independent power producers (IPPs) set up under the 1994 policy and another, set up under the 2002 policy, have been warned of the consequences if they do not terminate power purchase agreements (PPAs) voluntarily and switch to take-and-pay mode. The news reported on Monday.
“The government will no longer pay capacity payments of Rs 139-150 billion per annum to the above IPPs for the next 3-5 years, the owners of the above five IPPs have been informed. They have also been told categorically that the government has already made excess payments to the above IPPs in the form of capacity payments and capital returns, and has also repaid the loans of the IPPs,” officials in the know of the matter said.
The owner of one IPP, officials said, replied to key players in the IPP working group that if the government pays Rs55 billion to his company, he will not only be ready to terminate the contract but also hand over the plant to the government.
“However, he has been told that the government will not pay the Rs 55 billion and that he will not get control of the plant either. The only option left for him is to terminate the agreement on his own.”
The task force officials also pointed out that the IPP management has breached the agreement with the government, as it has obtained funding for other power plants by promising to build the plant, which means the contract is voided. “Therefore, these irregularities are sufficient to initiate criminal proceedings.”
“The owners have also been told that their IPPs are also involved in misleading the government by wrongly showing losses under the O&M (operation and maintenance) chapter during the period 2020-24, making unjustified profits of billions of rupees.”
The four owners, according to officials, including the former state oil minister during the PTI government, have been summoned to meet the top and powerful members of the task force on Saturday and the owners of the said IPPs have been told that they have no option but to terminate their agreements, failing which forensic audit of their plants would be launched and they would recover the excessive profits they earned in the past through wrongdoings and initiate proceedings against them.
A prominent business tycoon from Lahore, who also owns power plants besides having other businesses in various sectors of the economy, will meet officials today (Monday).
However, the current Minister of State for Power Division, Muhammad Ali, is said to have offered such IPPs that he would ensure the establishment of the private electricity market regime within the next two years so that they could sell their electricity to commercial players in the economy after finalizing the power purchase agreements.
