ISLAMABAD: The Independent Power Producers (IPPs) have warned that they would stop generating electricity if the issue of a whooping Rs400 billion circular debt was not resolved on priority.
The counsel for the Ministry of Water and Power said this while submitting a report before a three-member bench of the Supreme Court, headed by Chief Justice Iftikhar Muhammad Chaudhry, which resumed hearing of the IPPs’ petitions on Friday.
On the other hand, the government submitted before the Supreme Court that a payment of Rs24 billion would be made to eight Independent Power Producers (IPPs) in three equal monthly installments of Rs8 billion.
Khawaja Tariq Rahim, the counsel for the ministry, responding to a set of applications moved by the IPPs, apprised the bench that payment schedule had been reached between them and the private power companies under which Rs8 billion had been paid out of total Rs24 billion whereas two further installments amounting to Rs8 billion each would be paid on August 30 and September 30 respectively.
The counsel for the petitioners also submitted a report, saying that the circular debt had reached Rs400 billion and warned if the companies were not paid the outstanding amount, the power generation could witness a sharp reduction, adding to enhanced An amount of Rs45 billion had been agreed as undisputed overdue amount of the IPPs before the Supreme Court which had directed the authorities concerned and the National Transmission and Dispatch Company (NTDC) to reconcile overdue amount with IPPs and inform it about the payment schedule.
The IPPs and NTDC held several meetings during the last two weeks and reconciled the amount from total default out of which some payments during this time were made by the NTDC.
The NTDC and IPPs had finalised an amount of Rs45 billion as undisputed overdue outstanding out of which the government had offered to pay these IPPs Rs8 billion installments a month for the period of next three months while the formula for the rest of the overdue amount would be mutually worked out among the government, the NTDC and the IPPs.