Resolution of Rs53 bn in excess profits by IPPs: NAB gives nod for payment of 40pc dues of 12 IPPs

The government will soon initiate the process to pay 40 percent as first installment to 12 IPPs installed under power policy 2002 as NAB has given its approval to law division, saying the government can proceed to this effect.

“This development came on surface when the NAB gave its approval to the Law Division allowing the government to proceed to pay the dues of 12 IPPs installed under 2002 power policy, officials at Law Division and Power Division confirmed to The News. However, they said, the anti-graft body advised the government to secure the amount of Rs8.36 billion of Nishat Chunian as the investigation against the said IPP is still underway.

Earlier, in response to Power Division’s letter asking for green signal for initiating process to pay 40 percent as first installment of the total dues of 12 IPPs, NAB had said this is the government’s prerogative to act upon under revised agreements with the IPPs. However, the top bureaucracy at the Power Division sent the same to the Law Division for opinion. The Law Division, the officials said, instead of giving its opinion sent it to NAB asking for elaboration of the contents. The NAB explained saying that the government can proceed with regard to payment of the IPPs dues, but it should hold back Rs8.36 billion of Nishaat Chunain which is facing the investigation.

Under the revised agreements with 47 IPPs, the government was to pay 40 percent of the total dues of IPPs. The total dues amounted to Rs403 billion as of 30 November 2020. The government has paid the 40 percent as first instalment to about 35 IPPs and their revised tariffs are now applicable. However, 12 IPPs under 2002 power policy didn’t get the 40 percent of their dues so far. Now after the Law Division has managed approval from NAB, the power division will soon start paying the dues to IPPs. The total dues of 12 IPPs installed under 2002 policy stood at Rs145.7 till November 30, 2020 which further increased. As soon as the 40 percent (Rs58.4 billion) of the dues will be paid, NEPRA will enforce their discounted tariff. Out of Rs145,7 billion, the issue of excess profit amount to Rs53 billion will be resolved in 6 months once the arbitration court is completed

Meanwhile, the government has almost made its mind to appoint Justice (retd) Azmat Saeed on its behalf as member of arbitration court to resolve the much touted and delayed issue of excess profit amounting to Rs53 billion allegedly minted by 6 important IPPs currently functional under power policy 2020. Sources in the Law Division said that the government is inclined to appoint Justice (retd) Azmat Saeed head of local arbitration court and his nomination will be announced soon.

When contacted one of the entrepreneurs of IPPs confirmed that the government has indicated to nominate Justice (retd) Azmat Saeed as its member in the arbitration court. He informed that the IPPs which are also expected to nominate its members within a week time and both will appoint the third judge who will head the court.

The third one may also be from foreign country. He said their nominated member will not be less than the calibre of Justice Azmat Saeed.

The Mohammad Ali report on IPPs had accused the IPPs for illegally making excess profit of Rs53 billion. However, the IPPs rejected the Mohammad Ali report and declared it rubbish and not less than an allegation.

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