ISLAMABAD: Minister for Privatisation Muhammad Mian Soomro has warned the government that an inquiry against Independent Power Producers (IPPs) may hamper privatisation of RLNG-fired power plants, well-informed sources told Business Recorder.
At a recent meeting of Federal Cabinet, Minister for Privatisation mentioned concerns conveyed by the Financial Advisors to the Privatisation Commission for privatisation of power plants; he further noted that interested (credible) shortlisted companies were concerned at the report on IPPs which would have a subsequent adverse impact on the pricing and timing of transactions and, therefore, all such issues needed to be clarified.
Ministry of Privatisation had started due diligence in the privatisation of two RLNG-based power plants – Haveli Bahadar Shah and Balloki – with an objective to complete the transaction by the end of current financial year but due to global Covid-19 outbreak the process has been delayed.
The sources said the government has constituted a technical committee comprising members from IPPs and government for discussion and final decision. The government is being represented by Prime Minister Special Assistant on Power, Shahzad Qasim, Additional Secretary Ministry of Finance, Additional Secretary Power Division, Additional Secretary Law, Managing Director, NTDC, Chief Executive, Central Power Purchasing Agency Guaranteed (CPPA-G) and Managing Director, Private Power & Infrastructure Board (PPIB). However, the government is facing a crisis-like situation after the acting Managing Director NTDC resigned whereas the services of Chief Executive Officer (CEO), Central Power Purchasing Agency Guaranteed (CPPA-G) Abid Latif Lodhi are being terminated, setting aside the recommendations of Power Division.
Recently, the federal cabinet deferred constitution of Inquiry Commission and release of IPPs inquiry report for two months on the plea of holding meaningful discussions with the IPPs on reduction of tariffs.
According to sources, the committee has not yet held formal talks with the Independent Power Producers (IPPs) who have challenged almost all the claims of inquiry committee headed by former Chairman SECP, Muhammad Ali.
One of the representatives of IPPs told Business Recorder that the IPPs have not yet been conveyed any date for formal talks. The committee has accused IPPs of making massive profits over and above their legal right, suggested that Power Purchase Agreements (PPAs) should be reviewed and tariff should not be dollar but rupee based. IPPs Advisory Council has also started an advertisement campaign to clarify their position on the claims made by the IPPs nine member committee.—MUSHTAQ GHUMMAN