The Economic Coordination Committee (ECC) of the federal cabinet met on Thursday with the Minister of Economic Affairs, Omar Ayub, in the chair and approved the payment of Rs. 5.8 billion out of the total Rs. 14.619 billion to Nishat Chunian Power Limited (NCPL) which was blocked due to NAB investigation.
The ECC approved the payment mechanism and agreements with Independent Power Producers (IPPs) in meetings held on 8 February 2021 and the same was ratified by the cabinet on 9 February 2021.
On account of the NAB investigation, the ECC decided payments to all IPPs established before Power Policy 1994 and those under Power Policies 1994 and 2006 should be processed as per the 8 February meeting except for the IPPs set up under Power Policy 2002 till the conclusion of NAB investigation.
In response to the 8 February ECC meeting, NAB on 30 June 2021 informed that NCPL made Rs. 8.36 billion illegally by determining a higher tariff. NAB also recommended that the loss caused to the national exchequer by the IPPs established under Power Policy 2002 should be recovered before approving the payment mechanism and agreements of the 8 February meeting.
Later on 15 July 2021, the ECC constituted a renegotiation committee to revise the master agreements with IPPs set up under Power Policy 2002 in light of the NAB investigation. The committee referred the matter to Law Division for its opinion on the matter. On 17 August 2021, Law Division proposed to go ahead with master agreements already inked with IPPs except for NCPL.
Based on Law Division’s proposal, the committee decided to deal with 11 IPPs established under the Power Policy 2002 separately from NCPL and continued negotiations with NCPL to recover the loss caused to the state.
After due diligence, the negotiation committee recommended implementing the master agreements with NCPL and 11 IPPs and securing the payment of Rs. 8.36 billion from the NCPL. On 13 September 2021, the committee also established that the payment of Rs. 14.619 billion should be processed after recovering Rs. 8.36 billion from the NCPL. Later on 23 September 2021, the committee further recommended approving a supplementary grant of Rs. 52.4 billion to 11 IPPs.
As a result of these developments, the ECC has approved to release a total of Rs. 64 billion to 12 IPPs. However, only Rs. 5.8 billion out of the Rs. 14.619 billion owed to NCPL will be released initially.
