ISLAMABAD:* Port Qasim Electric Power Company (PQEPC) has warned the government of a potential suspension of plant operations due to prolonged payment delays, stating that it could halt production without incurring liquidated damages (LDs) under its Power Purchase Agreement (PPA).
Thank you for reading this post, don't forget to subscribe!The *1320 MW coal-fired plant, a key China-Pakistan Economic Corridor (CPEC) energy project, is among several Chinese-backed power plants facing severe financial strain. Total outstanding receivables for CPEC coal plants *exceed Rs 300 billion (over *$1 billion), hampering dividend payments to shareholders and stalling approvals for *new loans and insurance agreements.
In a letter to Finance Minister *Senator Muhammad Aurangzeb, PQEPC *CEO Wang Dongfang emphasized that despite consistent power supply and efforts to curb *circular debt, the company’s dues had surged to **Rs 93.5 billion ($334 million) as of February 26, 2025, with a **six-month payment backlog. Shareholders from *China and Qatar have expressed serious concerns and are demanding urgent resolution.
Wang highlighted that under *PPA Section 9.10, the company has the right to *suspend plant operations due to unpaid dues, warning that a shutdown would be a lose-lose situation for both sides. He urged the immediate release of funds to prevent disruptions, potential *Loan Agreement Defaults, and *GoP Sovereignty Guarantee Defaults.
In response, the Finance Division has disbursed Rs 18 billion to the Central Power Purchasing Agency-Guaranteed (CPPA-G) for energy subsidies, including tariff differentials, agricultural tubewell subsidies in *Balochistan and AJ&K, and a **23rd tranche under the Pakistan Energy Revolving Account, benefiting Chinese IPPs. However, industry sources warn that without *full payment clearance, the risk of plant shutdowns and energy shortages remains critical.
Story by Mushtaq Ghumman
