Arrears of Chinese power plants at record level of 529 billion

Islamabad: Arrears of Chinese power plants reached a record level of Rs 529 billion.

In the meeting of the Cabinet Committee on Chinese Projects under the chairmanship of Federal Minister for Planning Ahsan Iqbal, it was stated that the amount due to Chinese energy plants has increased to 529 billion rupees, the payments of power purchase to Chinese suppliers are not according to their invoices. This is due to the failure to control the revolving debt and the implementation of the Energy Framework Agreement.

According to the statement issued by the Ministry of Planning, the long-standing problems of IPPs of CPEC were considered in the meeting, which are a major obstacle in the financial closing of important projects. The Planning Minister directed the IPPs to submit the details of amounts due to the CPEC energy projects as soon as possible.

According to the sources, the details of the due amounts are already with the government, how much has been paid? No mention of it. Under the 2015 agreement, Pakistan is obliged to open a revolving fund to protect Chinese investors from revolving debts. Pakistan established a revolving fund of 48 billion rupees, which is barely sufficient for six months’ needs. The Chinese government is demanding Pakistan to abide by the agreements by declaring the revolving fund unacceptable.

Two Chinese power plants with a production capacity of 1824 MW are facing severe difficulties in financial closing due to delay in payment of Rs 529 billion arrears.

Sources said that the Chinese developers of the Rushkai Special Economic Zone consider the existing financial incentives insufficient to attract investment, the exemption from customs duties and sales tax for raw and semi-finished goods imported for processing and production in the Special Economic Zone. They have requested many times, have also demanded subsidized electricity rates and uninterrupted power supply.

According to the Ministry of Planning, Ahsan Iqbal emphasized the importance of providing power to the Special Economic Zones at subsidized rates and ensuring that the government does not incur losses. Guidelines to be taken to know how Special Economic and Export Processing Zones in Pakistan can be made more attractive.

The strategy of ensuring the security of Chinese citizens was also discussed in the meeting, for this, the need to create public awareness about the role of China in the development of Pakistan and it was also emphasized that there is no fear of security measures, but confidence. Emphasis was placed on the use of modern methods for security, monitoring the activities of anti-national elements and avoiding unnecessary hardships on the people.