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Govt agrees to pay Rs24bn to IPPs in 3 months

Pakistan government has submitted before the Supreme Court that a payment of Rs24 billion would be made to eight independent power producers (IPPs) in three equal monthly installments of Rs8 billion a month, a representative of the IPPs said on Wednesday.

The first installment will be paid by the government in August, 2012, the IPPs representative told The News.

He said that the court has admitted their submission and has given a two-week deadline to the government for reaching an agreement about payment of remaining undisputed amount over and above Rs24 billion to eight IPPs. An amount of Rs45 billion has been verified as undisputed overdue amount of these IPPs before the Supreme Court.

The Supreme Court has also directed the government not to deduct the capacity payment arising due to the non-payment of overdue amount to the IPPs by the government and the National Transmission and Dispatch Company (NTDC).

The Supreme Court was hearing the IPPs’ petition against the federal government and the NTDC over the sovereign guarantee default.

The SC had directed the government and the NTDC on July 13, 2012 to reconcile overdue amount with IPPs and inform payment deadlines on July 25, 2012 before the court.

The IPPs and NTDC had several meeting during the last two weeks and reconciled the amount from total default out of which some payments during this time were made by the NTDC.

The NTDC and IPPs had finalised an amount of Rs45 billion to be undisputed overdue outstanding out of which the government has offered to pay these IPPs Rs8 billion every month for the next three months above the regular energy and capacity invoices becoming due during this period. The formula for the rest of the overdue amount will be mutually worked out between the government, the NTDC and the IPPs.

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