London Court of International Arbitration (LCIA) ordered the National Transmission and Dispatch Company (NTDC) to pay more than Rs. 14 billion to nine Independent Power Producers (IPPs). The final award was given in favor of the IPPs in which the public sector transmission company was asked to pay out the amount pending on it, including interest payments and outstanding bills.
The IPPs had moved the international court to retrieve their long standing payments when the NTDC and the guarantor failed to solve the issue. Earlier, the international court had also given a verdict but the NTDC did not implement it and neither moved to an arbitration court to solve the issue which resulted in markup payment as well.
Spokesperson of the Ministry of Energy’s Power Division said that they are currently evaluating the decision of the LCIA and will take all measures to defend the case. The spokesperson said that the litigation case in which the decision has been announced is still under process in the Pakistan’s high court while another case is also being heard in the civil court. He said that as the case was under process, the expert award should not be based on it.
The IPPs in 2012 moved Supreme Court of Pakistan to compel NTDC to make payments to the private energy providers. However, only partial payment was made at that time and a Memorandum of Understanding (MoU) was signed with the IPPs to solve all the issues and have a clear-cut policy in the power purchase agreements. The MoU of Rs. 480 billion was signed outside the court to settle the circular debt.
The non-payment to IPPs led to liquidity crisis as the private power providers were not able to operate their plants at full capacity. The nine IPPs that were involved in the case included Liberty Power Tech, Nishat Power, Nishat Chunian, Sapphire Electric, Halmore Power, Atlas Power, Saif Power, Orient Power, and Hub Power Limited.