ISLAMABAD - A deadlock surfaced between the Finance Ministry and Independent Power Producers when some IPPs reportedly refused to sign any memorandum of understanding for receiving their due amount from the government.

Sources say that nine IPPs (who installed plants in 2002) have refused to sign any agreement/MoU for getting their due amount from the government. The government asked those IPPs to withdraw their cases from courts, which was not acceptable for them. 

The government has cleared Rs200 billion of those IPPs who had installed power plants in 1994. Finance Secretary Dr Waqar Masood told TheNation that the government had paid Rs326 billion to IPPs in first stage, as decided by the Economic Coordination Committee of the Cabinet.

Prolong meetings were held among various stakeholders including the finance, water and power, petroleum and natural resources ministries and representatives of IPPs.

Abdullah Yusuf, IPP Advisory Committee chairman, was not available to give his version on the situation. The ECC other day had decided that Rs326 billion would be settled before June 30 and the remainder would be cleared before August 10.

The ECC declared that this settlement would be subjected to the signing of MOUs by the IPPs with NTDC/CPPA on these conditions: (i) Conversion of projects with a capacity of more than 2,000 MW to coal. (ii) Optimal utilisation of available capacity by IPPs. (iii) One-month extension in the payment period to Pepco/CPPA. (iv) Early settlement of disputes in accordance with the provisions of the Power Purchase Agreement (PPA).

Sources say that some of the above mentioned points were not acceptable for IPPs, which created deadlock between them and the Finance Ministry.

Circular debt to be cleared by Aug 20: Dar

Finance Minister Ishaq Dar has said that with the payment of the circular debt, overall electricity supply in the country would improve. He reaffirmed the government's commitment of clearing the circular debt by self-imposed deadline of August 20.

Giving the details of the measures taken by the government in the National Assembly on Friday, Dar said: "Transactions for paying the circular debt to the private sector companies are on and banks are paying off Rs322 billion to these companies." He hoped that 1,700 megawatt electricity would come into the national grid after the payment and would mitigate the power outage.

The minister told the house that the Economic Coordination Committee had decided to procure another 100,000 tons of sugar and the Trading Corporation of Pakistan (TCP) was directed to procure and release the said quantity of sugar to the Utility Stores to meet the public demand during the holy month of Ramzan. He said the ECC had approved the Ramadan Package of Rs2 billion.

He said that essential items including flour, ghee, oil, spices, pulses, date, rice, sugar and other such items would be available at all outlets of Utility Stores on discounted rates. "10 to 30 percent concession would be provided on these products," he added. The finance minister also laid before the house the papers of schedule of authorised expenditures of 2013-14 and supplementary schedule of authorised expenditures of 2012-13.

The members were speaking on a point of order when Deputy Speaker Murtaza Javid Satti read out the presidential proclamation order to prorogue the budget session 2013-14.

The budget session, which started on June 12, lasted for 16 days.