Pakistan's largest private power producer, British-run Hubco, posted a net loss of 6.984 billion rupees (123.6 million dollars) in its annual report released Tuesday.
It said the loss, the first in its history, follows a profit of 6.704 billion rupees last year and was due to provisioning of 13.4 billion rupees against potential losses in its tariff dispute with the government.
Hubco has been fighting the tariff dispute with the Water and Power Development Authority (Wapda) since 1997.
Wapda accuses Hubco, in which Britain's National Power and Saudi Arabia's Xenel Industries have major stakes, and several other independent private producers of securing exorbitant rates during former prime minister Benazir Bhutto's government.
The company, which sells power to Wapda at 6.86 US cents per kilowatt hour, denies the charges.
Earlier this year Wapda announced it had concluded tariff adjustment agreements with 11 other independent power producers at an average of around five cents per kilowatt.
Pakistan's military regime led by the General Pervez Musharraf has vowed several times to resolve the row, which has badly shaken investor confidence.
"We want the Hubco (issue) to be resolved soon," Finance Minister Shaukat Aziz told a seminar in Islamabad Tuesday. "We will soon come to a solution. We want the issue to be resolved keeping in view the interests of both the parties."
Foreign investors have some 59 percent of Hubco, with National Power the major stake holder with 20 percent."The provisioning of doubtful debts worth 13.444 billion rupees shows that Hubco has lost hope to get its demanded tariff from Wapda," First Capital Securities head of research Arshad Arid said.
"It may pave the way for an agreement with Wapda to resolve the tariff dispute as the company has scratched the stuck-up amounts from its balance sheet."Hubco executives were not avialable for comment.
The company's shares have been heavily traded on the Karachi stock exhcnage this week as investors sniff a possible resolution to the tariff saga, analysts said.
In June the Pakistani Supreme Court barred Hubco from seeking international arbitration to resolve the dispute.Hubco had requested the International Chamber of Commerce constitute an arbitration tribunal to rule on the row.—AFP.
©--Agence France Presse
© 2000 Mena Report (www.menareport.com)