ISLAMABAD: Federal government and K-Electric are said to have inched closer to final drafts of long outstanding three pacts, Tariff Differential Subsidy (TDS), Inter-Connection Agree-ment (ICA) and Power Purchase Agency Agreement (PPAA), expected to be signed before dissolution of National Assembly, well-informed sources told Business Recorder.
The Prime Minister Task Force headed by former PM Shahid Khaqan Abbasi held its 15th meeting to discuss all unresolved issues and evolve consensus for initialing, the sources said, adding most of the parties have initialed the draft pacts.
The meeting, sources said, discussed contents of Task Force Report, which will now be presented to Prime Minister Shehbaz Sharif who will approve it with or without proposing any amendment.
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“We are near to finalizing the Draft Report which will be submitted to the Prime Minister, who constituted task force. It will now be up to the Prime Minister to approve the Final Report and direct Power Division to submit it before the Federal Cabinet or he can suggest any other amendment,” the sources said, hoping that the longstanding issue is about to be sorted out in the next few days.
Prime Minister, sources said, has also been approached by the top brass of Saudi Arabia during his visits to Saudi Arabia on the issue of KE.
According to sources, hours after the Task Force meeting, KE also initialed the TDC resolution mechanism as numbers of payables and receivables till FY 2021-22 have been finalized. The amount of payables and receivables is about Rs 700 billion.
An insider told this scribe that Chairman of K-Electric Board also attended the meeting, who represents top man of M/s AsiaPak.
On December 15, in a meeting held in Prime Minister Office (PMO) former Prime Minister directed Nepra to resolve issues surrounding KEL integration plan, contracts and connection agreements, etc.
Power Division, sources said has already finalized new PPAA and IC with Karachi Electric for supply of 1200MW electricity to the latter, but disagreement still exists on base load verses firm capacity and Late Payment Surcharge for regulatory delays between the two parties.
A Power Purchase Agreement (PPA) was signed with KESC (now K-Electric) by NTDC on January 26, 2010 for sale purchase of power up to 50MW. The agreement was effective for 5 years till 25 January 2015. Sindh High Court in suit No 205 restrained the Government and NTDC from interfering in the functioning of power purchase agreement and passed an order to NTDC to continue to supply electricity to KESC on Feb 6, 2014.
The previous government, however, could not resolve the issue of KE despite a request by top Saudi authorities.
As the coalition government headed by Prime Minister, Shehbaz Sharif, came to power Saudi investors met him and apprised him about the issues and sought his help. Sharif then constituted a Task Force headed by former Prime Minister, Shahid Khaqan Abbasi to hold meetings with the stakeholders and finalize recommendations. The Task Force has held 15 meetings so far.
During the visit of Minister of State for Petroleum and Natural Resources, Musadik Malik early this year, Saudi Minister of Finance brought up the issue of Al-Jomaih Group’s investment in K-Electric and said that the issue faced by one investor could potentially discourage other investors from entering the Pakistani market. 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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