International investors want Pakistan to remit dividends owed to their shareholders in power plants under the China-Pakistan Economic Corridor (CPEC).
The pending dues for CPEC power projects are around Rs. 550 billion. This was a key issue raised by China when Foreign Minister Ishaq Dar and Planning Minister Ahsan Iqbal recently visited Beijing, reported Business Recorder.
The Private Power Infrastructure Board (PPIB) has asked the State Bank of Pakistan (SBP) to expedite the remittance of shareholder dividends but the regulator itself is helpless due to dollar shortage.
Recently Qatar’s Sheikh Hamad Bin Jasim Bin Jaber Al Thani wrote to Prime Minister Shehbaz Sharif requesting payment of $450 million in receivables for the Port Qasim Electric Power Company (PQEPC). His letter revealed that the project has not paid out any dividends to investors and now totaled $558 million.
PQEPC has warned of a potential default on loan agreements and government guarantees if dues are not settled.
A settlement agreement to resolve the issue of foreign exchange availability has been preliminarily approved and may increase the owed amount to Rs. 13.6 billion. PQEPC has indicated that it could suspend operations without incurring liquidated damages if payments are not made.
At a recent meeting of the Board of Investment (BoI), Additional Director SBP Muhammad Tahir said there were issues in the past related to foreign exchange reserves but things were improving since then. He mentioned that now, there is a queue system for dividend repatriation and a Local Deployment Policy that allows companies to earn interest on idle dividends until they can be repatriated as reserves improve.
What?? Iron brothers and friendly countries want to be repaid? How dare they ask?