ISLAMABAD: National Transmission and Despatch Company (NTDC) has claimed Liquidated Damages (LDs) of over $13 million from Siddiqsons Energy Limited (SEL), as it is entitled to LDs under the PPA and the CCoE decision before signing of the subject PPA, well-informed sources told Business Recorder.
Managing Director NTDC, sources said, referred to the Committee meeting on pending issues related to 330-MW Thar Coal Power Plant by Siddiqsons Energy Limited (SEL) held on April 1, 2024 at Ministry of Planning and Development and Special Initiatives under the chair Secretary to APEX committee SIFC Islamabad, wherein the exact amount of NTDC Liquidated Damages (LDS) recoverable from SEL was required to be submitted to the Power Division for onward submission to the APEX Committee of SIFC.
In this regard, NTDC stated that NTDC LDS amounting to $13.276 million is recoverable from SEL on account of LDs due to delay in achieving COD. The exact amount of LDs is $13, 276,592 calculated under Section 9.4 (d) (ii) of the Power Purchase Agreement (PPA) between the CPPAG and SEL.
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“If the Company (SEL) is in breach of its obligation under Section 4.1 (b) to achieve the Commercial Operation Date by the Required Commercial Operations Date, then for each month the Company shall pay …an amount equal to $ 6.435 per kW of contract capacity per month subject to accrual of actual payments to be made by NTDC to PMLTC and proportionate to utilised capacity of the HVDC Transmission Line until the Commercial Operations Date is achieved.
The Parties acknowledge that this amount is inclusive of the capacity payment payable by NTDC for the HVDC Transmission Line in pursuance of the Cabinet Committee on Energy’s decision as notified on February 1, 20182.
The Parties further acknowledge and agree that it would be difficult or impossible at the date of this Agreement to determine with absolute precision the amount of damages that would or might be incurred by the Power Purchaser as a result of the company’s failure to perform those matters for which liquidated damages are provided under the section 9.4“.
According to MD, NTDC, he is aware that the PPA under Section 2.1 (d) states that PPA shall become effective in its “entirety” once the notice of financial close is received from the PPIB.
Since the financial close has not been achieved and Letter of Support (LoS) is under the cancellation process by the PPIB and performance guarantee amounting $ 3,500,000 has also been encashed by the PPIB the same has been communicated through PPIB, wherein it was stated that the SEL failed to achieve financial close despite obtaining seven extensions through amendments in the LoS.
“NTDC believes that irrespective of the fact that the PPA has not been effective in its entirety yet the interconnection work described under Schedule 3 of the PPA, which includes design, engineering, construction, installation and commissioning of interconnection facilities has already been performed by NTDC under the Agreement,” MD NTDC added.
Copyright Business Recorder, 2024
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