ISLAMABAD-The Prime Minister Office has intervened to resolve the issues faced by the Chinese IPPs, installed under China Pakistan Economic Corridor(CPEC), following the Chinese government expressed concern over overdue payments of Rs420 billion ($1.5 billion), import restrictions and revolving funds issues.
Chinese businesses are very concerned due to overdue payments to Chinese IPPs, currently standing at $1.5 billion, said Chinese charge d’affaires Pang Chunxue in a meeting with Tariq Fatimi, Special Assistant to the Prime Minister (SAPM) on Coordination, official source told The Nation. Following the meeting, Tariq Fatimi, in a letter addressed to Federal Minister for Planning, Development and Special Initiatives, Ahsan Iqbal, said that the Chinese Charges d’ Affaires, Ms Pang Chunxue raised concerns regarding power projects, established under CPEC, said the source. The first concern was related to overdue payments to Chinese IPPs, currently standing at $1.5 billion and causing huge concerns to the Chinese businesses. Chinese power plants at Hubco, Sahiwal and Port Qasim are facing currency exchange restrictions, which is causing difficulty in importing coal, said the letter available with the scribe. These power plants require a specific-grade coal for power production. If the same is purchased on spot from local market, then NEPRA mandates that the price should not be higher than the price of the imported coal, which is not feasible due to exchange rate fluctuation/rupee devaluation, said the letter regarding the Chinese concern. Capacity payment deduction still exists despite assurances given in the past; as a result of which these power plants are being penalized for not operating at full capacity, the letter pointing towards the Chinese concern said. “She clarified that these power plants are not operating at full capacity due to difficulty in purchasing the requisite amount of coal for power production,” the letter maintained. There are still gaps between the Revolving Fund raised by Pakistan side and the Revolving Account Agreement signed between the two countries.
Another concern was related to import restrictions, raised by the Chinese side, due to which many of the Chinese companies are facing difficulties in customs clearance at Karachi Port. Pang Chunxue also suggested that their concerns could have been discussed in meetings of Joint Committee, a forum specifically established by the Prime Minister to resolve issues of the Chinese IPPs, but most regretfully, this committee, which was to meet every two weeks, has not had any meeting since the inaugural meeting in December last year. The SAPM has recommended to the Planning Minister that a meeting of the Committee may kindly be called soon, wherein representatives of the Chinese Embassy, as well as the relevant companies, may please be invited and their concerns addressed meaningfully, so that we are not viewed as less than serious in resolving Chinese concerns.