LAHORE - About 13 independent power producers (IPPs) of the country have invoked sovereign guarantees of the government through finale notice to recover unpaid overdue invoices of more than Rs48 billion.

Under the sovereign guarantee, the government has to pay Rs48 billion within 10 days from the date of submission of final notice. Sources said that notices were served on Thursday after the failure of the NTDC and the government to pay overdue outstanding amount even after passing of 30 days from the initial notice before this final notice.

The producers that have served final notices include the IPPs established under the 1994 power policy – Lal Pir Power (Rs4.552b), Pakgen Power (Rs7.778b), Kohinoor Energy (2.306b) – and the ones set up under the 2002 power policy – Liberty Power (Rs5.361b), Nishat Power (Rs4.881b), Attock Gen Ltd (Rs4.449b), Atlas Power (Rs4.555b), Nishat Chunian Power (Rs4.16b), Hubco Narowal (Rs5.024b), Saif Power (Rs1.503b), Sapphire Electric (Rs1.396b) and Orient Power (Rs1.18b) and Halmore Power GCL (880m).

The IPPs officials said that it is ironic that on one hand the government invites foreign investment in power generation sector while the existing companies are running from the pillar to post for their payment against which the government has already acquired the power and even collected the cost from the consumers.

This is the fourth time that IPPs have initiated process to revoke their sovereign guarantees for recovery of their pending payments. Now the government have ten days to pay off the said amount otherwise the IPPs will have the right to get sovereign guarantees encashed under their PPAs.

According to recent reports, the total pending payments to 57 Independent Power Producers (IPPs) has reached to Rs439 billion as on February 15, 2017 which shows the inefficiency and attitude of the government towards the issue and if it does not pay attention then the power producers will be left with no option other than invoking sovereign guarantee again to recover these payments.

The proceeding of the process of sovereign guarantee is likely to bring bad name to the country while it will affect its credit rating internationally as well the confidence of new investor under CPEC. Not long ago, Pakistan was listed in the countries who have track record of having longest period consumed in dispute resolution on contractual obligations.

Our Staff Reporter