A high-level meeting presided over by the Secretary Water and Power, Younas Dagha on Thursday remained inconclusive and the much-awaited revised Power Purchase Agreement (PPA) and new Gas Supply Agreement (GSA) with K-Electric was not approved, well informed sources KE told Business Recorder. The representative of Sui Southern Gas Company Limited (SSGCL) informed the meeting that they are still negotiating the Gas Supply Agreement (GSA) whereas the issue of PPA did not come under discussion.
K-Electric is getting 650 MW electricity from the national grid even after the expiry of PPA 10 months ago. The representative of KE informed the meeting that the Karachi Water and Sewerage Board is not clearing its bills while other government departments following suit, creating financial problems for the company.
Both the KE and Karachi Water and Sewerage Board are yet to reconcile their figures which irritated the head of the sub-committee. The issues of KE with the Finance Ministry and Central Power Purchasing Agency (CPPA) also remained unresolved. KE owes Rs 51.6 billion to including the late payment surcharge of which Rs 27 billion is immediately payable. KE has disputed charges of Rs 4 billion.
A payment mechanism to NTDC by KE is specified under clause 9.3-A-(i) 2 & 3 whereby KE shall pay NTDC (CPPA) payment against the relevant invoice for each billing period equal to the total value of the invoice including sales tax minus the amount of tariff differential claim. According to a decision of Council of Common Interests (CCI), the K-Electric will "use its idle capacity to reduce their 650 MW import from National grid by 350 MW".
Senate's Standing Committee on Finance in its meeting held on July 13, 2015 decided to review the contract of privatisation of Karachi Electric (K-Electric) previously known as the Karachi Electric Supply Company (KESC) after its alleged failure to implement an agreement with the government. KE with billing up to May-2015 has to pay a total amount of Rs 51.6 billion out of which Rs 27 billion is immediately payable. However, the government has not yet implemented the recommendations of the Senate committee.
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