Minister for Water and Power Khawaja Asif has reportedly directed Private Power & Infrastructure Board (PPIB) to encash performance guarantee of $0. 675 million of 135 MW Star Power Limited despite repeated requests from Sindh government, sources close to Secretary Water and Power told Business Recorder. This decision was taken at a recent meeting of the PPIB in the committee room of Petroleum Ministry. Khawaja Asif presided over the meeting.
Water and Power Minister, sources said, also used derogatory language against the sponsor and urged the officials to make his remarks part of the minutes. The sources said, the IPP had requested another extension and used the platform of Sindh government. The provincial government, sources said, had assured the Ministry of Water and Power and PPIB that in case extension is granted to the IPP, the project will be established in Dharki (Sindh) as per the commitment. In June, 2011, the then Minister for Water and Power, Syed Naveed Qamar had granted the last extension despite resistance by the then Secretary Planning and Development, Sohail Ahmad.
The Board was informed that PPIB had held a number of meetings with the sponsors. The representative of the sponsors revealed that as per OPIC''s requirement, the Environmental and Social Impact Assessment (ESIA) study was expected to be updated by end of April 2011. After that it would have been uploaded for around 2 months on OPIC''s website for comments, following which it would take approximately another one month for completion of the project appraisal by OPIC, before the case was to be presented for Board approval in September 2011 or December 2011.
Subsequent to OPIC Board approval, an additional time would have been required to raise the debt from international banks based on the OPIC''s guarantee and it was hoped that OPIC would be able to achieve a financial close (FC) by March 2012. PPIB Board was informed that sponsors could not demonstrate progress to achieve an FC. The board members deliberated the matter at length. Minister for Water and Power, who is also the chairman of the Board, expressed anger at the PPIB for not encashing the performance guarantee.
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