The Economic Coordination Committee (ECC) might withhold payments worth millions of rupees to the independent power producers (IPPs) after an investigation conducted by NAB. According to the inquiry committee, the IPPs had received excess payment of Rs1,000 billion. However, the government has signed a revised deal with the IPPs for payment of Rs403 billion to them instead of asking them to return the payments.
The ECC had postponed discussion on the issue in the last meeting but it is anticipated that the issue would be taken up in its meeting scheduled for Wednesday (today)
Meanwhile, relevant record of the deal with the IPPs has been provided to NAB Lahore.
The ECC was informed that because NAB had launched an investigation into the alleged excess profit, it would be suitable to wait for conclusion of the probe before going ahead with payments to the IPPs.
It was suggested that payments to all the IPPs under the Power Policy 2002, which had signed agreements, may be stopped till the conclusion of NAB investigation. However, it was proposed that payment to all the other IPPS should be made. The process of signing arbitration submission agreements with the IPPs under the Power Policy 2002 should also be halted till the end of NAB probe, it was recommended.
The Cabinet Committee on Energy and the ECC had earlier reviewed a report prepared by an implementation committee mandated to convert memoranda of understanding (MoUs) into binding agreements, and approved the payment mechanism and agreements with the IPPs in meetings held on February 8, 2021.
These decisions were ratified by the cabinet on February 9. Agreements were signed with the IPPs after obtaining the cabinet’s approval. The first installment is to be paid to the IPPs within 30 days of the signing of agreements.
The excess profit for the IPPs had been bought to attention in a report of the Committee for Power Sector Audit, Circular Debt Resolution and Future Roadmap.
The MoUs contained a clause which said that in order to assess if the IPPs had made any excess profits, the reconciled numbers would be submitted to the National Electric Power Regulatory Authority (Nepra).
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Nepra being a legal body would hear and decide the matter in accordance with the Power Policy 2002.
NAB has declared that it is conductions into allegations of corruption and corrupt practices against owners/ management of a power company, officers/ officials of Nepra, officers/ officials of the Central Power Purchasing Agency (CPPA) and others. It has requested for provision of relevant record and current status of the MoUs.