Saif Power Limited (SEL) has urged Central Power Purchasing Agency-Guaranteed (CPPA-G) to accelerate its payments as its liquidity position is critical.
In a letter to Chief Executive Officer (CEO), CPPA-G, Rehan Akhtar, CEO SEL, Sohail H Hydari has stated that the power company’s overdue receivables have increased to Rs10.93 billion which were Rs10 billion last month.
According to CEO of the company, the stock of receivables of his company at the time of his meeting with CEO CPPA-G were far higher than those of the three sister companies.
However, during the meeting, CEO CPPA-G was confident that his company would pay at least Rs2 billion to bring Saif Power at par with the other sister companies and would then continue with regular payments. However, the actual situation has been in the opposite direction.
Power producer demands payments on daily basis
CEO SEL reminded CEO CPPA-G that the company was facing a huge liquidity crunch and operations would not be sustainable, adding that as of today, just the fuel cost of RLNG on full load for one month is around Rs3.3 billon excluding sales tax. In addition, the power company has to make payments to General Electric (GE), to Insurance, to WPPF and towards the legal and administrative costs of the company including NEPRA fees.
The cost of fuel has risen significantly (around 2.4 times on average) since the beginning of this year but the payments from the power purchaser have been only 60 percent of the increased costs. Therefore, the absolute amount of receivables (due to such increased cost) is continuously rising.
“If the company doesn’t get any immediate relief, its operations will be affected. Now is the time to make substantial payments so that when the plant is going into annual maintenance, the receivables can come down,” said Hydari in his letter.
The power company has requested CPPA-G to manage payments on an immediate basis so that SEL is brought at par with other companies as the liquidity situation of the company is critical.