Chinese firm seeks Rs12.35bn dues for power project

A leading state-owned Chinese firm has expressed concern over delay in payment and asked the Ministry of Energy (power division) to release Rs12.35 billion as Transmission Service Payment (TSP) related to 660kV Matiari-Lahore High Voltage Direct Current (HVDC) Transmission Line for September 2021 to February 2022.

The China Electric Power Equipment and Technology Co Ltd (CET) / State Grid Corporation of China (SGCC) registered in Pakistan as Pak Matiari-Lahore Transmission Company Private Limited (PMLTC) has also quoted the Chinese government and the embassy as expressing their concern at the issue and asked the ministry to take up this issue on top priority, Dawn has learnt.

In a recent letter to energy minister Hammad Azhar, the company explains that it has received the TSP for September to November 2021 and a partial payment (19.46 per cent) for the month of December 2021.

It apprises the minster that in accordance with the Transmission Service Agreement (TSA), by beginning of March 2022, it should receive the TSP from September 2021 to February 2022, along with payment for adjustment of indexation, and the TSP for the pre-CoD (commercial operation date) period that remained pending at Rs21.1 billion, whereas the payment it received so far is Rs8.75 billion — 41.4 per cent of the total amount it billed.

The company mentions the facility agreement (between PMLTC and the lender — China Development Bank) under which it is obliged to release loan principal and interest amounting to USD 72.2 million before April 15, 2022 without any delay.

In addition, the company (PMLTC) also needs to meet other obligatory payments to maintain its operations at an amount of the USD 44.2m including but not limited to Sinosure-free, commercial insurance premium, operation & maintenance cost timely.

“We need to stress again that the total amount of invoices we billed NTDC is Rs21.21bn, out of which, after receipt of Rs8.75 billion, the unpaid amount is Rs12.35bn,” reads the letter, seeking clearance of the amount not later than March 24 since the approval of foreign exchange conversion from the State Bank of Pakistan for making payment to lender takes time. It also desired to take the daily TSP to Rs0.42bn from Rs0.05 to 0.15bn to make it avert default under the facility agreement.

The company said: “Considering the difficulties we are facing, also both Chinese Government and the Chinese Embassy attach great importance to the payment issue of this CPEC flagship project, we humbly request your highest attention to immediately tackle this issue on top priority and instruct / coordinate with the parties concerned on urgent basis to make substantial effort for increasing day payment amount day by day to avoid default of the PMLTC’s obligations.”

The NTDC managing director told Dawn that no work related to checking, clearance of bills and sending to the Central Power Purchase Company (CPPA) was pending on the part of the project owner / client — the NTDC. “This issue emerged before my appointment as MD. However, we always give priority to such payments. And we did,” he said.

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