Chinese co lodges complaint against SBP

ISLAMABAD: Chinese firm Pak Matiari-Lahore Transmission Company (Private) Limited (PMLTC) has lodged a complaint against the State Bank of Pakistan (SBP) for not approving foreign exchange for debt servicing and Sinosure premium.

At a recent meeting with Power Minister Sardar Awais Leghari, President/CEO PMLTC Zhang Lei said that as per the signed Transmission Service Agreement (TSA)/ LLA agreements, the NTDC is contractually obligated to acquire adequate land rights in the land route, to provide the title documents and lease the Converter Station related areas to PMLTC for construction and operation of the HVDC transmission project, however, there have been some lands still pending including;(i) 10 acres-12 Guntas for Matiari Converter Station;(ii) 8 kanal for Lahore Converter Station; and ( iii) 206 kanal for Lahore Electrode Station. All three pieces of land should have been transferred before the start of construction, however, they are still pending without being transferred/mutated in the name of NTDC for overlong time, giving rise to martial adverse effect to the operation of the project.

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As agreed the Transmission Service Payments are payable on monthly basis within thirty days, however, the payments are customarily delayed by NTDC/CPPA-G for four to five months in general, with a recovery rate of 84.5 percent, the funds received on account of Transmission Service Payments are merely sufficient to account for the debt servicing costs and basic operating costs, no additional fund is available for distribution of dividends, which have substantially deprived/ diminished the interests of the shareholders and investors.

The PMLTC further stated that whenever required, it has submitted the application for foreign exchange to the State Bank of Pakistan for approval, however, the approval is either limited to the foreign debt servicing and Sinosure premium, or stood pending for very long time.

“We have some funds in PKR in our bank accounts equal to about $ 53 million have not been approved by the State Bank of Pakistan. We are also obliged to inject one installment of principal and interest into the Debt Service Reserve Account as per requirement of Facility Agreement, even though we have tried many times to obtain the approval from the State Bank but regretfully frustrated, which has directly given rise to fundamental default under the Facility Agreement executed with the Lender for financing the project,” said the president PMLTC.

Copyright Business Recorder, 2024