After much deliberation during the meeting with Government’s Negotiation Committee, the National Accountability Bureau (NAB) has approved the deals signed between Independent Power Producers (IPPs) and Government of Pakistan (GoP).
A press release has also been released by NAB which states that the Government Negotiation Team has briefed the Chairman NAB, former Justice Javed Iqbal, at NAB headquarters about the revised contracts with 47 IPPs and concessions extracted through the recent deal with IPPs. The team also briefed him about an arbitration agreement clause added to these contracts which will determine alleged excess savings of Rs. 55 billion with IPPs.
Chairman NAB has appreciated the efforts of Negotiation Team whose efforts have lead to a projected Rs 836 billion in saving.
In 2020 the government had signed MoUs with the IPPs which were later finalised into agreements. SAPM on Power, Tabish Gauhar while briefing the Cabinet said that while finalizing the agreements, all clauses of MoUs were converted into Agreements in letter and spirit in favour of the Government of Pakistan (GoP). The CPPA, AEDB and PPIB Boards had approved signing and executing Master Agreements and amendments to PPA/EPA and IA. The Advisor to the PM on Commerce Razzak Dawood recused himself from discussions on the issue of payments mechanism to IPPs due to conflict of interest.
The payment mechanism stated that the GoP was to clear outstanding payables of Rs. 403 billion to 46 IPPs in 2 instalments. The first instalment of Rs. 161 billion, i.e., 40% to consist of 1/3rd cash, 1/3rd 5-years Sukuk and 1/3rd 10-years PIBs. The payment to the 2002 policy IPPs would be after determination of revised tariff by Nepra.