Pakistan: Chinese Power Producers Threaten of Shutting Down if Not Paid Pending Payments

Published May 10th, 2022 - 11:22 GMT
Pakistan: Chinese Power Producers Threaten of Shutting Down if Not Paid Pending Payments

Amid pending payments of Rs 300 billion, dozens of Chinese power producers in Pakistan said that they would be forced to shut down their power plants this month unless payments were made upfront.

A plethora of complaints were brought up in a meeting on Monday presided by Planning Minister Ahsan Iqbal with more than 30 Chinese companies operating under the flagship multi-billion-dollar China-Pakistan Economic Corridor (CPEC).

About 25 representatives from Chinese independent power producers (IPPs) spoke one after the other and complained about the buildup of their dues and warned that without upfront payments they would shut down within days, reported Dawn.

The power producers said the authorities were pressuring them to maximize generation to meet peak summer needs, but "this is impossible for us in view of serious liquidity issues".

One of the complaints put forth by the Chinese companies was the complex visa procedures for Chinese executives, and taxation among others. There were also counter complaints from the Pakistani side as well, on delayed responses to their communications.

They also complained about the rising fuel prices, particularly that of coal. They pointed out that the prices had gone up by three to four times, which meant they should at least be given three to four times greater liquidity to make fuel arrangements.

The power producers noted that payments for already used power have not been made. They said that they are also financially crippled due to the Covid-19 pandemic and complained the tax authorities had started taxing them at higher rates, as per the media outlet.

They also slammed the ex-Prime Minister Imran Khan for not fulfilling the promises made by him during his visit to China. The contractual requirement of a revolving fund for automatic payment of IPPs' dues and subsequent promises by the previous government remain unfulfilled, they said.

The meeting oversaw the presence of companies from various sectors including energy, communication, railways, and others. 

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