Clear dues or face music, IPPs threaten govt - 10 IPPs warn federal govt to shut down power generation plants if receivables of Rs 42 billion not cleared till April 19

ISLAMABAD: The Indep-endent Power Producers (IPPs), major contributors of thermal power generation, on Tuesday threatened to shut their power generation plants if the federal government failed to pay their receivables of Rs 42 billion till mid-April. Well-placed sources in IPPs Advisory Council (IPPs AC) informed this scribe that more than 10 IPPs including Nishat Chuniya, Nishat Power, Liberty Power, Atlas Power, Halmore, Saif Power, Sapphire, Orient, Rosh and others served notices to the federal government in this regard to pay their receivables. He further revealed that these certain IPPs also asked the federal government in written for their sovereign guarantees, which IPPs submitted, while signing agreement with the government to run their power generation businesses in the country. Certain 10 IPPs served notices for sovereign guarantee to the federal government on March 19, 2012 It is the second time, when IPPs have asked the federal government for sovereign guarantee as they are facing treacherous financial crisis, adding "IPPs took this particular step according to the Power Policy 1994 and 2002," the sources added. Earlier, nine IPPs had threatened the federal government by issuing notices for sovereign guarantee on August 26, 2011, and the federal government had arranged finance for those IPPs within 25 days. Because of the non-serious attitude that could be observed by the recent gaming of power managers as power shortfall immediately declined from 6,850 megwatts (MW) to 3,500 MW within 24 hours after severe agitation of the public, however in respect of certain financial crisis of IPPs, this shortfall will once again shoot up till the end of next month, if IPPs close down their power plants having power generation capacity of 2,100 MW. IPPs, the key stakeholders of power sector decided to stop the electricity generation after April 19, if subsidiary body of the federal government Central Power Purchase Agency (CPPA) did not mature the payments of power generation companies amounting to Rs 42 billion. Besides receivables of these particular 10 IPPs amounting to Rs 42 billion, the accumulated receivables of private power generation sector shot up to Rs 320 billion. Power sector on Tuesday jolted the entire nation, when electricity power shortfall hit the highest level of shortfall at 6,850 MW, however according to latest statistics issued by the Ministry of Water and Power, power shortfall has been decreased up to 3,500 MW within 24 hours. Power managers, besides adopting viable strategy for increasing power generation, tightened their lips particularly after the treacherous power crisis triggered chaos in various cities of the country. Well-placed sources in the Ministry of Water and Power informed this scribe that power crisis could worsen even more in the near future because of lesser electricity generation through hydel resources, while thermal power plants also reduced the generation volume due to non-availability of enough fuel. Sources revealed that troika of power, petroleum and finance divisions locked their horns over payment issues, while the volume of circular debts crippled the fuel supply to thermal power generation companies, which caused power crisis to worsen further in the country particularly when summer season has been growling its arrival. Power managers were of the view that another major factor of ongoing power crisis is linked with the non-availability of fuel for thermal power plants either gas, furnace oil or diesel along with non-availability of enough water in reservoirs to generate hydel power. According to the latest calculations of Pakistan State Oil (PSO), the receivables of the state-run company towards the power sector shot up to Rs 147.53 billion, out of which Rs 48.525 are towards Water and Power Development Authority (WAPDA), Rs 82.521 billion Hubco, while an amount of Rs 16.490 billion is payable by KAPCO. Because of drastic decrease in water levels in the dams on account of enormously low inflows, hydel power generation decreased up to 700 MW, which widened the demand and supply gap. A senior official of Indus River System Authority (IRSA) on condition of anonymity informed this scribe that live water storage in both Terbella and Mangla dams was observed at zero level and the volume of inflows released was the same as outflows from both major reservoirs. According to daily water report, water outflows in Terbella Dam at Indus River were recorded at 22,800 cusecs against inflows of 23,500 cusecs, while on Jehlum River, water outflows from Mangla Dam were recorded at 29,730 cusecs against inflows of 29,086 cusecs. IRSA official further maintained that because of releasing water share of provinces according to pact for irrigation purposes against low inflows, enough water for hydel power generation is not available, while this situation would remain the same in near future. http://www.dailytimes.com.pk/default.asp?page=2012\03\28\story_28-3-2012_pg5_1