IPPs established under 2002 policy: Power Division backed out of IAs?

ISLAMABAD: Energy Department is alleged to have “sponsored out” of Implem-entation Agreements (IAs) with the Impartial Energy Manufacturers (IPPs) established beneath the Energy Coverage 2002, and proposed negotiation of Grasp Agreements within the gentle of Nationwide Accoun-tability Bureau’s (NAB’s) fresh letter, assets with reference to Minister for Making plans, Construction and Particular Projects instructed Industry Recorder.

Energy Department’s stance is being considered as opposite to the standpoint of Finance Minister, Shaukat Tarin, who on June 22, 2021 whilst replying to an enquiry with reference to stalemate in bills to IPPs and Roosevelt lodge, confident the Cupboard of answer of the problem via approaching discussions with the Nationwide Responsibility Bureau.

The Cupboard Committee on Power (CCoE) headed by means of Asad Umar, Minister for Making plans, Construction and Particular Projects, was once scheduled for Monday (July 12, 2021) to take a choice in this factor however was once cancelled on the 11th hour.

Sharing main points, the assets mentioned CCOE on 24 September, 2020, constituted an Implementation Committee for implementation of MoUs. The CCoE and Financial Coordination Committee (ECC) of cupboard regarded as the file by means of Implementation Committee and licensed the cost mechanism and agreements with IPPs in conferences hung on February 8, 2021, which was once ratified by means of the Cupboard on February 9, 2021. On a abstract submitted by means of Energy Department on Would possibly 5, 2021, ECC determined and Federal Cupboard ratified the next choice of the ECC on Would possibly 18, 2021: bills to all IPPs (beneath the Pre-1994, 1994 and 2006 Energy Coverage) is also processed in line with the signed agreements except for the IPPs beneath Energy Coverage 2002 until the realization of the NAB investigation.

The subject of the alleged saving within the tariff element of 12 IPPs of the 2002 Coverage is already beneath investigation by means of NAB that may be asked to inspect and validate the method of negotiations and signing of agreements together with Arbitration Submission Settlement. NAB was once additionally asked to tell if it has any objection to the signing of those agreements and making of bills to the IPPs of the 2002 Coverage, and Energy Department accordingly conveyed the verdict of ECC, as ratified by means of the Federal Cupboard to NAB on Would possibly 25, 2021. In keeping with a letter by means of Energy Department, NAB declined to inspect or validate the method, or to tell if it has any objection to those agreements or making bills to IPPs beneath those agreements via their letter dated June, 08, 2021.

In view of the former selections by means of ECC and Federal Cupboard and reaction from NAB, Energy Department submitted a abstract for the respect of ECC with a suggestion that the bills to IPPs (beneath the Energy Coverage 2002) might proceed to be withheld, and the method of signing Arbitration Submission Settlement with those IPPs and notification of the revised price lists as made up our minds by means of Nepra might stay suspended until NAB investigations are concluded. Alternatively, the time table was once deferred.

NAB has now contended that “unlawful” acquire of Rs. 8.36 billion has been established towards M/s Nishat Chunian Energy Ltd, because of decision of tariff on the upper facet. NAB additional intimated that “Ministry of Power, if it so wants, might continue matter to all criminal exceptions to the revised agreements duly vetted by means of the Ministry of Regulation and Justice, with the IPPs beneath Energy Policy2002, after securing the quantity of loss led to to the State, as established all through the said NAB investigation in the most productive hobby of the State”.

Energy Department argues that the “unlawful” acquire of Rs. 8.36 billion established towards Nishat Chunian by means of NAB is sort of the precise quantity made up our minds by means of the negotiation committee. An identical quantities have been additionally made up our minds towards different IPPs of the 2002 Coverage. The quantities made up our minds as extra earnings by means of the Committee for Energy Sector Audit, Round Debt Solution & Long term Roadmap have been fairly other. NAB in its letter is speaking in regards to the agreements with the entire IPPs of the 2002 Coverage.

Energy Department additional argues that agreements with the 2002 IPPs, finalized by means of the Implementation Committee, don’t supply for deduction of “unlawful” acquire made by means of an IPP and the agreements already inked will wish to be reviewed. With a view to assessment the agreements, the similar procedure must adopted, which was once adopted for previous approval, i.e., negotiation by means of the Implementation Committee with the IPPs and approval by means of CCoE ahead of referring the subject to ECC of the Cupboard.

After explaining the historical past, Energy Department has submitted the next for attention of CCoE: (i) Implementation Committee constituted by means of CCoE on September 24, 2020 is also assigned the accountability of renegotiating the Grasp Agreements with IPPs established beneath 2002 Coverage to cater to the NAB’s letter of June 8, 2021; and (ii) results of the re-negotiations by means of the Implementation Committee is also submitted for attention and approval by means of CCoE.

Copyright Industry Recorder, 2021

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