The SECP in a response to a letter of the Minister of Water and Power Khawaja Asif, clarified that the entity is only the corporate regulator in case of the IPPs as such it does not oversee their operations, which are regulated by NEPRA.
The SECP letter further said that it was not mandated by law to undertake inspection of these entities on a routine basis.
The corporate regulator on several complaints had ordered the inspection of the accounts of the IPPs but the companies challenged the decision in courts and got stay orders from high courts in Lahore and Islamabad, the letter said.
The IPPs that have got stay orders from the courts since 2012 included Atlas Power, Liberty Power, Orient Power Company, Sephyr Electric Company, Safe Power Ltd, Mian Mansha’s Lalpir Power Ltd and his son Hasan Mansha’s Pak Gen Power.
The SECP in its letter to the minister of power further informed that the Commission has hired services of senior lawyer Khawaja Haris who is looking into these cases but due to summer vacations in courts petitions regarding early hearing of these cases could not be filed.
It is pertinent to mention that the incumbent government has paid staggering amount of Rs 480 billion in arrears to the IPPs including 60 billion rupees of Universal Service Fund (USF) against a Supreme Court decision. A three-member bench of the apex court headed by Justice Jawad S Khawaja had given a verdict against spending the USF.
The IPPs earlier, in talks with the People’s Party government had offered a relief of 25 percent of the total arrears to the government. But the PML-N government paid the arrears of three years in one go. The payment also included Rs 31 billion penalty for not purchasing electricity from the IPPs. On the other hand the government relieved Rs 22.91 billion penalties against the IPPs.
Under an agreement signed in 1994 the government had to arrange the oil supplies for power generation in IPPs in exchange the company would have been paid the spendings on costs. The agreement in year 2002 was amended and the companies were alowed to arrange oil supplies on their own with conditions of pre-audit, post-audit and inspection, which could not happen for once since than.