The government is unlikely to clear massive dues of independent power producers (IPPs) despite threats of curtailment in power generation by 750 mw, sources in PPIB told Business Recorder. IPPs have sent threatening signals at a time when the country is already in the midst of punishing load shedding and the Prime Minister has constituted a committee under the chairmanship of Finance Minister to resolve the issue of unscheduled load shedding attributed largely to the inter-circular debt.
Sources said that the Ministry of Water and Power is constantly in contact with the Ministry of Finance and Pakistan Electric Power Company (Pepco) for early payment to the IPPs, but the response of Finance Ministry has not been encouraging. Sources added that even though the IPPs' demand is legitimate, yet they would not be allowed to pressurise the government for immediate payment.
On Monday, an emergency meeting of Independent Power Producers Advisory Council (IPPAC) was held, which was presided over by its chairman Abdullah Yusuf (a former Secretary, Petroleum). According to a press release, all members unanimously expressed concern over the ever-increasing overdue amounts payable to them by Pepco which, as on August 8, 2011, touched the peak of approximately Rs 210 billion.
Additionally, Gul Ahmed Energy in the south has been closed for the last 3 weeks due to non-payment of almost Rs 3 billion by KESC. This is raising the chances of bank default as well as restricting supply of power due to non-availability of fuel. The position has reached such a crisis that within the next few days they would be forced to shut down their power plants unless they are paid their dues.
The members felt particularly concerned that the present position of load shedding would be aggravated and would unduly create more hardships for the public particularly during the holy month of Ramazan. The Council, however, requested the newly formed committee on power, headed by Finance Minister and represented by Minister for Water and Power, Minister for Petroleum and Natural Resources.
Deputy Chairman Planning Commission and Governor State Bank of Pakistan, to immediately convene a meeting with all IPPs, so that it can be apprised of their severe liquidity problems. The meeting resolved to reiterate to the committee the urgency to immediately inject at least Rs 150 billion to save the IPPs from total closure within the next few days and failure to do so would cause shortage of electricity for the consumers, the press release added.
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