The eight Independent Power Producers (IPPs) in the country are producing power despite extreme difficulties to avert power crisis as their outstanding payments for electricity supply has climbed to Rs 56 billion by December 03, 2012. According to details, the eight IPPs which under 2002 policy have to purchase fuel etc on advance payment submitted a writ petition in the Supreme Court of Pakistan after the government failed to honour its sovereign guarantees in July 2012.
These IPPs included Nishat Power Limited, Halmore Power, Sapphire Power, Liberty Power, Orient Power, Atlas Power, Saif Power and Nishat Chunian Power Limited. At that time, after reconciliation, both government and the IPPs agreed that the defaulted amount was Rs 45 billion. On the directive of the apex court the government promised to pay Rs 24 billion in 3 equal monthly installments in August, September and October. The Government has paid these 3 installments each late by 10 to 15 days from the promised date. The court had also directed to pay the remaining Rs 21 billion. Government of Pakistan promised this amount in 9 equal monthly installments starting from November 20 (this was paid on 30 November - late by 10 days) and ending by June 2013. In this way the payment of 45 billion rupees will take one year to be cleared.
The SC further instructed National Transmission and Dispatch Company (NTDC)on August 15, to make the current billing of petitioner IPPs up to date in accordance with the power purchase agreement ensuring that NTDC should not default in making payment of current billing so that outstanding balance may not pile up again and resultantly the IPPs may produce the electricity regularly to reduce/eliminate the load shedding, a fundamental right of the people of Pakistan and a basic necessity for industry to increase production. Contrary to above, according to sources, the outstanding amount has increased to Rs 56 billion now because NTDC is only paying about 59 percent of current billing of these IPPs while Rs 19 billion out of Rs 21 billion is yet to be paid.
An executive of one of the affected IPPs said that despite SC orders, the current dues of these IPPs were still not being fully cleared. He said the NTDC still owed an amount of Rs 37 billion to the eight IPPs for the power supplied after July 13, 2012 the cut off date between the amount of arrears and current billing as per order of the Supreme Court.
"The eight IPPs billed an amount of Rs 90.538 billion to the NTDC for the power supplied from 1st July 2012 to 30th November 2012 but NTDC has made payment of only Rs 53.424 billion which is 59 percent of the billed amount while Rs 37.114 billion are still outstanding," he said adding that payment of Rs 19 billion of the arrear amount is also still pending.
A power sector expert Mohsin Syed expressed wonder that how these IPPs are continuing power generation despite such a huge outstanding amount. He said that currently these IPPs were producing 1600 MWs out of the total power production of 10,000 MWs and if they are forced to shut down the operations, the country will further face load shedding of 3.5 hours which will result in a huge crisis. If this continues, the power crises will become worse at the time of canal closure when the hydle generation will be stopped (3000 mega watts) as well as the above plants.
"NTDC is not following the principle of dispatch order on the basis of economic order to the efficient power producers which is causing the purchase of costly electricity from the less efficient plants whereas NTDC should pay these efficient plant first to get their 100 percent capacity which is cheap and then to less efficient plants and so on," Mohsin added.