The Water and Power Development Authority (Wapda) has blocked a move by the Private Power Infrastructure Board (PPIB) to incorporate changes in original agreements signed with the Independent Power Producers (IPPs) without bringing it to the notice of the government, knowledgeable sources in Pepco told Business Recorder from Lahore. Sources said Wapda chief Tariq Hamid discussed this issue with water and power minister Liaquat Ali Jatoi in a recent meeting held in Islamabad.
The minister barred the PPIB from making any sort of changes in the Power Purchase Agreements (PPAs) except for replacing the word Wapda with the National Transmission and Dispatch Company (NTDC).
According to these sources, the government was already facing problems with the World Bank for not fulfilling commitments regarding corporatisation of power sector due to non-co-operation of some tope level Wapda officials.
But now the PPIB, which was responsible to deal with the IPPs, tried to incorporate changes in the PPAs without any justification which was blocked.
Sources further said the transfer of PPAs from Wapda to the NTDC was also in jeopardy because of non-co-operation of IPPs, which were of the view that they could not transfer agreements from Wapda to the NTDC without prior consent of their lenders.
The Wapda Power Privatisation Organisation (WPPO) had sought IPPs consent on the issue but their response was not positive, citing reasons that they have to consult their respective lenders, sources said, adding the minister, however, has directed Wapda and the PPIB to finalise PPAs with IPPs and the NTDC.
The PPIB, which claimed that it had arranged two successful road shows in Dubai and London on expenditures of some of the companies having interest in new projects, has also been barred to hire International Finance Corporation (IFC) without taking into confidence members of the board including the minister in-charge.
The PPIB wants to present three power projects for the International Competitive Bidding (ICB) for the first time, which was also being backed by the World Bank.
It was the second time in two weeks when the minister restrained the PPIB top brass from making important decisions without consulting the ministry and Wapda.
All companies have also signed Loan Liability Transfer Agreement (LLTA) with Wapda after which they are now responsible to service the share of their loans.