German envoy Alfred Grannas has asked Chief of Army Staff General Asim Munir to help renegotiate contract termination for Siemens, which owns a 26 percent stake in Rousch Pakistan Power Limited (RPPL).
The German government has refused to accept the contract termination but is open to closure if Pakistan accepts six conditions, reported Express Tribune.
The German envoy wrote to Asim Munir that Siemens’ longstanding partnership in Pakistan’s power sector faced jeopardy and was hurting investor trust. The proposed settlement currently requires RPPL to transfer the plant to the federal government for $1 in exchange for Rs. 5.5 billion in early termination compensation and Rs. 2.8 billion for ongoing maintenance.
Siemens has detailed conditions to address key financial and operational concerns. These include assurances from the Finance Division and central bank for the smooth transfer of settlement funds, dividends, and other payments to German accounts before the plant handover.
Siemens also seeks indemnity for its board members from future claims and tax liabilities, resolution of a sales tax dispute with Pakistan’s Federal Board of Revenue, and an immediate Rs. 3.1 billion in outstanding dividends as a goodwill gesture.
The ambassador expressed concern over the potential damage to Pakistan-Germany business relations and noted that repeated contract renegotiations since 2000 have hindered Siemens from achieving an adequate return on investment in Pakistan.
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