IPPs demand payments from NTDC as per Supreme Court''s directives

The eight Independent Power Producers (IPPs), which obtained relief from the Supreme Court of Pakistan after the government had failed to honour its sovereign guarantees, have asked the National Transmission and Dispatch Company (NTDC) to make payments as per court orders to avoid contempt of court.
Sources at the Ministry of Water and Power confirmed receiving similar letters from the eight Independent Power Producers addressed to the NTDC on August 17, 2012, with the reminder that the Supreme Court, in its order dated August 15, 2012, had directed the Government (power purchaser - NTDC) to make the current payments of the eight IPPs, strictly in accordance with the power purchase agreement.
These payments, according to the order, would be in addition to the payments of Rs 44.938 billion arrears that the government admitted it owes to these IPPs. The purpose of the separate streams of the above two types of payments is to reduce the outstanding balance of 44.938 billion through payment of arrears in instalments. It is to also ensure that the new overdue balance does not add to the amount of the existing arrears by making full payment of all current billing.
In this regard, one of the 8 IPPs has pointed out to the NTDC that the payment of Rs 1.6 billion has become due after July 13, 2012, in accordance with Section 9.5(b) of the power purchase agreement. The letter further informed the NTDC that according to section 9.6 (a) (i) of the PPA, the amount claimed therein was to be paid on or before the thirtieth (30th) day, following the day that the invoice was received by the power purchaser. It reminds the NTDC that the amount of Rs 1.6 billion being claimed by the said IPPs became due according to the PPA from July 13, 2012 to August 1, 2012.
These payments are to be cleared as per court order immediately, as any delay would cause an increase in the amount of the existing arrears (44.938 billion), which is a clear violation of the court order. Sources in the Ministry of Water and Power have confirmed the receipt of such letters. The NTDC, however, has not responded to the IPPs'' letters, nor has it paid the overdue amount of the current billing.