ISLAMABAD: Saudi Arabia’s Aljomaih Automotive Company’s investment has sought Pakistan government’s help to resolve issues related to Fauji Kabirwala Power Plant, well-informed sources told Business Recorder.
According to Pakistan’s envoy to Saudi Arabia, in his recent meeting with the Deputy Minister of the Saudi Ministry of Investment, it was highlighted that a Saudi company, M/s Aljomaih Automotive Company (AAC) was facing some issues related to its investment in Pakistan.
In the follow up to the meeting, the Saudi side shared further details of the matter with the Mission.
Gas supply from MPCL: FKPCL asked to obtain PPIB’s consent
Pakistani envoy, Ahmad Farooq, informed Islamabad that as per his understanding, the Saudi side has given the following sequence of events: (i) in 2008, the AAC as part of a joint venture with Tanjong/ CGN-Edra invested in Fauji Kabirwala Power Company Limited (FKPCL) and acquired a 157-MW Combined Cycle Power Plant with approximately $110 million investment; (ii) the Power Purchase Agreement (PPA) for the plant was for 30 years (commercial operations started in October 1999) and the Gas Supply Agreement (GSA) for the plant was for 15 years which has already expired; (iii) since the expiry of the GSA, FKPCL was supplied gas by Oil & Gas Development Company Limited (OGDCL) intermittently; (iv) supply of gas to the plant was completely stopped in 2022; (v) subsequently, WAPDA declared the unavailability of gas as a Force Majeure Event and stopped paying any capacity payments to the company; and (vi) WAPDA has also not paid the company’s invoices amounting to $8.5 million.
The Saudi side has requested the Embassy of Pakistan in Riyadh to raise the matter with concerned authorities of Pakistan for seeking assistance in gas allocation till the expiration of PPA in 2029, and assistance for collecting the overdue payment from WAPDA.
The Saudi side has also indicated informally that the Saudi Investment Minister was following up on the matter and was willing to talk to the concerned Minister for resolving the issue.
Pakistan Ambassador argued that “keeping in view our strong brotherly ties with the Kingdom and our focus on seeking new investments from Saudi Arabia, it is important to find amicable solution to the problems faced by their investors.”
Copyright Business Recorder, 2023
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