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Supreme Court seeks payment schedule for IPPs

The attorney general has been directed by the Supreme Court of Pakistan to inform the court by Friday as to when the payments would be made to the eight Independent Power Producers (IPPs) by National Transmission and Dispatch Company (NTDC).

The Supreme Court of Pakistan heard the petitions of the IPPs on Wednesday against the Government of Pakistan due to its continuous disregard of its obligation and inaction even after several sovereign defaults had occurred on the part of the government.

The three-member bench, headed by Justice Tassadaq Hussain Jilani, said that electricity is required by everyone and its non-availability is hurting the people by increasing joblessness and thereby, the quality of life.

During the hearing, the attorney general accepted the liability of the Government of Pakistan and NTDC but said that the amount payable to IPPs was lesser than claimed in petitions.

Moreover, he said that there was an unrecoverable amount of Rs 10 billion every month from the consumers; whereas, Rs 67 billion were stuck due to different stay orders pending in high courts in regards to fuel adjustment charges.

The bench commented that both reasons of non-payment were government related issues and had nothing to do with the IPPs.

“Their [IPPs] payments should be made so that they can continue to produce electricity for the country.

This is an urgent issue and should be settled without any loss of time,” the bench remarked.

Declaring the payment issue of utter importance, the attorney general has been given till Friday to inform the court when the payment will be made to IPPs for smooth supply of power to the public.

The IPPs’ counsel requested the court to make the settlement agreement dated September 27 the order of the court for interim period. This settlement agreement was an interim solution agreed between the parties when the same situation had risen in 2011; therefore, it may be extended till the decision on the petition. The bench adjourned the proceeds till July 13, 2012.

The eight IPPs- that had earlier invoked the sovereign guarantee -had filed the petition to initiate legal action domestically instead of approaching the international arbitrators.

The petition filed by the IPPs highlighted the failure of the government of Pakistan to make timely payments against the power supplied.

The petitioners said that the power crisis in the country had worsened as they could not buy fuel to run their units because of huge default of Rs 61.401 billion by the government.

This amount includes the capacity payment of Rs 19.379 billion, energy payment of Rs 37.846 billion, and other payments of Rs 4.176 billion.

Those included in the petition are Liberty Tech, Orient Power, Atlas Power, Nishat Power, Nishat Chunian, Saif Power, Halmore Power, and Sapphire Electric for payment of the outstanding dues of Rs 11.131 billion, Rs 4.121 billion, Rs 10.478 billion, Rs 9.661 billion, Rs 10.899 billion, Rs 5.722 billion, Rs 2.415 billion and Rs 6.974 billion respectively.

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