Deals with IPPs: Govt faces backlash from foreign govts
- Sources say German government has conveyed reservations of M/s Rousch Power Project Limited (RPPL), a power company owned by the family of former Minister Commerce and Industries Abdul Razak Dawood
ISLAMABAD: The government has reportedly started receiving disturbing messages from different foreign governments over ‘one-sided’ deals with some Independent Power Producers (IPPs) through the energy task force, well-informed sources told Business Recorder.
Sources said the German government has conveyed reservations of M/s Rousch Power Project Limited (RPPL), a power company owned by the family of former Minister Commerce and Industries Abdul Razak Dawood.
Under the Negotiated Settlement Agreement (NSA) with M/s Rousch Power, in addition to the outlined principles the following was agreed: (i) Being on BOOT basis, the Company will transfer the Complex to Government of Pakistan or its designated entity at one USD which will be paid in equivalent PKR at the prevailing exchange rate; (ii) the Company will be paid Rs 5.5 billion in lieu of OFME period due to early termination; and (iii) the Company will be paid Rs 2.8 billion for preservation of the Complex till the transfer to government of Pakistan or its designated entity.
Govt ends deals with five private IPPs
According to sources, Georg Klussmann, Head of Division for Pakistan at German Federal Foreign Office, in a communication with Pakistan’s Embassy in Germany stated that German Government remains concerned about the manner of the negotiations with RPPL and shareholder i.e. Siemens.
M/s Siemens views the Settlement Agreement as unacceptable to foreign investors in its present form but is willing to negotiate in good faith in order to come to a resolution.
“Berlinis concerned that the protracted matter may overshadow future bilateral relations. Germany is aware of the risk this matter poses to the trust of German enterprises and investors and thereby broader Pakistan-German business relations,” the sources continued.
German side reiterated previous concerns about negotiations in connection with RPPL and sought intervention from decision-makers, the sources said, adding that Pakistan’s Charge d’Affaires in Berlin has proposed further engagement with German side to reach an amicable solution.
Copyright Business Recorder, 2024
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