ISLAMABAD : Private Power Infrastructure Board (PPIB) is said to have sought Supplementary Grant (SG) of Rs over 1.3 billion to meet expenditure of arbitration at London Court of International Arbitration (LCIA) between M/s Star Hydropower Limited (SHPL) and Government of Pakistan.
The arbitration dispute between the Star Hydro Power Limited and the GoP under the GoP Guarantee of December 20, 2012 issued by the GoP with respect to payment obligations, inter alia, of the CPPAG/NTDC under and pursuant to the Power Purchase Agreement (PPA) of March 8, 2012 executed between the Company and the Power Purchaser. Recently, an award of May 07, 2024 was rendered by London Court of International Arbitration (LCIA) in an arbitration No.215280 between the Company and the Power Purchaser pursuant to a dispute under the PPA. The Second arbitration No 246378 is between the Company and GOAJK pursuant to the GOAJK implementation Agreement of February 11, 2012 executed between the Company and the GOAJK. The Company sought to recover certain amounts under the Guarantee which it claimed to be due and payable from the GOAJK pursuant to the AJK IA on account of the imposition of sales tax on services under the Azad Jammu and Kashmir Finance Act, 2015 with effect from July 2015.
Accordingly, the draft letters addressed to Secretary, Finance Division have been prepared for provision of supplementary grant on the letterhead of Secretary, Power Division. Earlier, PPIB through Power Division demanded budget allocation for the fiscal year 2024-25 that was also discussed in priority committee meeting held in Finance Division. However, no allocation of budget/funds have been apportioned in regular budget for PPIB in respect of Arbitration for the fiscal year 2024-2025 by the Finance Division.
Managing Director PPIB is of the view that that PPIB is not in position to endure such hefty arbitration costs keeping in view its enhanced budgetary requirements and operating cost pursuant to merger of AEDB into PPIB. Further, post-merger of AEDB, PPIB is not receiving any budgetary support from MoF/GoP as previously being provided to ex. AEDB.
PPIB has requested Power Division to take up the matter with the Finance Division on urgent basis along with allocation of foreign exchange (Pounds Sterling) budget GBP 3,776,372/-equivalent to Rs 1,322,691,041/- to enable PPIB to meet aforesaid expenses with respect to subject arbitration against the Government of Pakistan. Furthermore, MoF is also required to provide the approval to State Bank of Pakistan for foreign exchange availability for all such payments required for subject arbitral proceedings.
