Senior Management of Shanghai Electric Power (SEP) is in federal capital seeking help from the new government to remove hurdles in execution of $ 1.7 billion deal with M/s Abraj for 66.44 per cent stake in K-Electric, well informed sources told Business Recorder.
Unconfirmed reports reveal that SEP has also asked M/s Abraj to renegotiate deal as the power utility has not been given the multi-year tariff indicated by the agents of Abraj.
On Friday, SEP delegation flanked by the top management of KE met with Prime Minister's Advisor on Commerce, Textile, Industries and Production and Investment, Abdul Razak Dawood and other concerned officials of the Ministries and discussed the hurdles which are hampering smooth transfer of 66.44 stakes.
"SEP discussed acquisition of controlling stakes in KE and the next steps to complete the transaction," said an official.
When contacted, Prime Minister's Advisor Abdul Razak Dawood said that SEP has issues with regard to its transaction of KE which will be sorted out soon.
Finance Minister, Asad Umar has assigned the responsibility to Dawood to resolve issues related to KE's shares' sale purchase deal. Recently, this matter was discussed in the Economic Coordination Committee (ECC) of the Cabinet meeting wherein ECC directed Privatisation Division to deliberate upon the issues relating to the sale of KE's 66.4% shares to M/s Shanghai Electric Power Company Limited (SEP), China in consultation with Petroleum Division and Power Division and submit viable recommendations to the Cabinet Committee on Privatisation (CCoP) in two weeks.
Subsequently, this issue also came under discussion in the Federal Cabinet meeting on September 5, 2018 wherein Cabinet ratified the ECC direction.
Official sources told Business Recorder that pursuant to the Federal Cabinet and ECC decisions, Privatisation Commission has requested Ministry of Energy (Power Division) to update it regarding status/progress on settlement/resolution of KE's liabilities towards NTDC/CPPA for submission in the upcoming meeting of the CCoP for issuance of National Security Certificate (NSC) to KES Power Limited for transfer of its 66.4% shares to Mi/ SEP, China (proposed transaction).
Highly placed sources said that during a recent meeting of the ECC when the issue of electricity tariff came under discussion Abdul Razak Dawood raised the issue of KE tariff but Finance Minister ignored him, saying that this issue has nothing do with the Discos tariffs.
According to sources, the main issue is liabilities of CPPA and SSGC but KE is not committing to clear these liabilities prior to execution of sale purchase agreement.
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