ISLAMABAD: The government has reportedly shown willingness to resolve dispute on outstanding receivables/payables with K-Electric through mediation by one of the former three Attorney Generals, well-informed sources told Business Recorder.
The issue, sources said, was discussed during the last meeting of PM Task Force on Energy, headed by former Prime Minister Shahid Khaqan Abbasi.
The two key foreign investors’ groups of KE have given one-month deadline to Islamabad for withdrawal of all litigation, clearance of outstanding payments and signing of three long-awaited pacts or face litigation at international forum.
The deadline was given on January 5, 2023 through a legal notice to Attorney General for Pakistan. Copies of notice have also been sent to Prime Minister Shehbaz Sharif, Minister for Power and Minister for Law and Justice.
The sources said, there is clear division amongst Board members representing Arab countries and western countries on the notice, as the latter group has delinked itself with the notice served by Al-Jomaih Power Limited and Denham Investments Limited, upon the Islamic Republic of Pakistan under the Agreement on Promotion, Protection and Guarantee of Investments amongst the Member States of the Organization of the Islamic Conference (OIC Investment Agreement).
According to sources, the Board members representing Western shareholders, led by Mark Gerad Skelton, however, maintain that since the claimants of notice has four Directors at the Board, hence they can serve legal notice.
During the meeting, government officials offered that the government is ready to resolve receivables and payables issue through mediation if Al-Jomaih Power Limited and Denham Investments Limited, with their notice, the sources said. KE team, however, took the stance that it would present the government offer before the Board and in case of approval, it will accept it.
As of June 2022, the Receiving Entities claim Rs573 billion of which Rs246 billion is the late payment charge. “Since privatisation, KES Power has invested over $4 billion in KE and the power value chain in the region serviced by KE. Most regrettably, however, the investment has been frustrated owing to the failure of the GoP to honour its contractual commitments,” said Sheikh Abdulaziz H Al-Jomaih, in the letter notice.
The sources said, government has also shown willingness to supply 1000 MW of electricity to KE on permanent basis whereas in case of surplus power, KE will get additional supply on pro-rata basis.
“Things have started moving expeditiously after notice from Al-Jomaih Power Limited and Denham Investments Limited,” the sources continued.
During a recent visit of Minister of State for Petroleum and Natural Resources, Musadik Malik, Saudi Minister of Finance also brought up the issue of Al-Jomaih Group’s investment in K-Electric and said that issue faced by one investor could potentially discourage other investors from the private sector in Saudi Arabia. He said the Kingdom wanted to bring more investors to Pakistan but as long as there were isolated negative examples it would be difficult to build trust.
Copyright Business Recorder, 2023
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