IPP-govt close to resolve payment issues

Salim Ahmed

Lahore

The government invited IPPs to listen to their issues to positively conclude this latest fiasco. “We have taken this initiative to resolve this issue and the IPPAC has agreed not to run advertisement against the government with regards to the said issue,” said a source at Private Power Infrastructure Board (PPIB).
The source added that the latest meeting between IPPs and PPIBon Monday ended on hopeful note and it is expected that the issue would be resolved soon. “The agenda of next meeting is also encouraging,” said the source. The agenda of next meeting includes: Ensuring compliance with PPA; past due receivables; tax issues; LNG supply; and dispute resolutions.
The source added that following PPA payment methodology of FIFO is a ‘must’ from now on. Also, if CPPA has a dispute to an invoice of IPP, it needs to follow the process of issuing an Invoice Dispute Notice (IDN) as per PPA and cannot hold amounts without IDN. “If CPPA/NTDC has a claim against an IPP, it needs to issue an invoice as per the PPA, and cannot just set aside funds unilaterally,” said the source.
Moreover, rejection of guarantee calls on frivolous (and legally wrong) grounds implies mal-intention so this needs to be rectified.
Regarding past due receivables, timelines to retire all past due amounts needs to be put in place and once such timelines are put in place. The agenda about tax issues is that GST on fuel versus electricity needs to be equalized. “Issues apply to RFO for over a year and ongoing, and to HSD for three months in 2016.
This must be done no later than the end of March 2017 and Other refunds relating to other tax matters must also be cleared by June 2017,” stated the agenda. And the government needs to decide if it supports FBR position in GST apportionment. “If it does, it needs to confirm that if Supreme Court rules in favor of FBR then IPPs will pay only what they receive from NTDC on this account, both for underlying amount as well as any interest/penalty.
“IPPs will not take any exposure on amount or timing. If the government does not agree with FBR, then it needs to direct FBR to withdraw its appeal from SC and/or clarify the policy in upcoming Financing Bill. “The government needs to decide on WWF and WPPF.

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