21:59
Unknown
KARACHI: The ministry of law and justice has advised the ministry of water and power to resort to expert mediation with the independent power producers (IPPs) instead of legal proceeding regarding delay in payments by the power purchaser to IPPs under the Power Policy 2002, said sources.
“To checkmate the advances of IPPs through the Supreme Court and possible indictment of the ministry of water and power for deduction / withholding of capacity payments to the IPPs, the law ministry has rightly advised to choose negotiations option,” said a source privy to the matter.
The ministry of law on the query from the ministry of water and power indicated that it is illegal to insist on fulfillment of agreement by one party, while the National Transmission and Dispatch Company (NTDC) and the government of Pakistan continued to default, he added.
Sources said NTDC deducted the capacity invoices of IPPs on failure to generate power on CPPA demand as the IPPs did not have money to purchase fuel on advance payment from the fuel supplier because of default in the payment of invoices by NTDC and default in payment against call of sovereign guarantee by the government.
“In fact, the IPPs are available for generating electricity but fails to produce due to sole reason of NTDC and the government default in paying the overdue payment, which is contractual default on the part of NTDC and the government of Pakistan,” he said.
“The NTDC said that if they are not paid than they will not be able to produce power, which is not due to any fault on their part but solely due to non-payment by the purchaser,” said representative of the IPPs Advisory Council.
When the SC, he said, questioned the ministry of power on this matter, it sought the help from the ministry of law, which in turn advised to resort to negotiations due to possible indictment of the ministry of water on factual grounds.
According to a document of the ministry of law, NTDC / GoP is to purchase the electricity produced by the IPPs and make capacity payments to them. NTDC is admittedly defaulting in making capacity payments, it said.
It also revealed that after discussing some provisions of the power purchase agreement (PPA), the referring division has made a query and sought reply.
The query was whether delay in the energy payments by the power purchaser would entitle the IPPs to capacity payments in the event of their non-generation / non-supply of electricity?
The advice of the ministry of law and justice is very clearly indicating that the position taken by the ministry of water and power is not supported by the power purchase agreement and the laws of the land, which govern the PPA. Therefore, defending the case in the court will not be possible.
However, to save the ministry of water and power from complete failure, the ministry of law and justice advised a way out of this situation through ‘expert mediation’.
“To checkmate the advances of IPPs through the Supreme Court and possible indictment of the ministry of water and power for deduction / withholding of capacity payments to the IPPs, the law ministry has rightly advised to choose negotiations option,” said a source privy to the matter.
The ministry of law on the query from the ministry of water and power indicated that it is illegal to insist on fulfillment of agreement by one party, while the National Transmission and Dispatch Company (NTDC) and the government of Pakistan continued to default, he added.
Sources said NTDC deducted the capacity invoices of IPPs on failure to generate power on CPPA demand as the IPPs did not have money to purchase fuel on advance payment from the fuel supplier because of default in the payment of invoices by NTDC and default in payment against call of sovereign guarantee by the government.
“In fact, the IPPs are available for generating electricity but fails to produce due to sole reason of NTDC and the government default in paying the overdue payment, which is contractual default on the part of NTDC and the government of Pakistan,” he said.
“The NTDC said that if they are not paid than they will not be able to produce power, which is not due to any fault on their part but solely due to non-payment by the purchaser,” said representative of the IPPs Advisory Council.
When the SC, he said, questioned the ministry of power on this matter, it sought the help from the ministry of law, which in turn advised to resort to negotiations due to possible indictment of the ministry of water on factual grounds.
According to a document of the ministry of law, NTDC / GoP is to purchase the electricity produced by the IPPs and make capacity payments to them. NTDC is admittedly defaulting in making capacity payments, it said.
It also revealed that after discussing some provisions of the power purchase agreement (PPA), the referring division has made a query and sought reply.
The query was whether delay in the energy payments by the power purchaser would entitle the IPPs to capacity payments in the event of their non-generation / non-supply of electricity?
The advice of the ministry of law and justice is very clearly indicating that the position taken by the ministry of water and power is not supported by the power purchase agreement and the laws of the land, which govern the PPA. Therefore, defending the case in the court will not be possible.
However, to save the ministry of water and power from complete failure, the ministry of law and justice advised a way out of this situation through ‘expert mediation’.
Posted in: Business news
0 comments:
Post a Comment