Payment dispute between CPPA-G, KE remains unresolved
In May 2024, the Power Division released Rs 172.8 billion to CPPA-G on account of Tariff Differential Claims (TDC) for KE. In this regard, KE referred to the Power Purchase Agency Agreement (PPAA) between KE and CPPA-G and the Tariff Differential Subsidy Agreement (TDSA) between KE and the Government of Pakistan, both signed in January 2024.
According to KE, since the execution of the PPAA, it has fulfilled its obligations and paid Rs 71.5 billion directly to CPPA-G for power purchases—demonstrating its commitment to enhancing liquidity and sustainability within the power sector. As a result, KE states that there are no outstanding payables to CPPA-G after December 31, 2023.
Discos, KE's tariffs: CPPA-G seeks up to Rs1.5 negative adjustment
Furthermore, the power utility noted that following the release of the TDC by the Power Division on KE's behalf, all dues to CPPA-G up to December 31, 2023, have been cleared. In fact, KE claims it made an excess payment of Rs 7.43 billion, which it seeks to be adjusted against future invoices under the PPAA.
KE has requested CPPA-G to issue a credit note of Rs 7.43 billion, to be made directly to KE rather than CPPA-G, in line with the TDS agreement. The utility has sent multiple letters to the Power Division requesting this credit note and seeking that future TDC disbursements related to the post-December 31, 2023 period be released directly to KE, as per the effective TDSA.
Most recently, on June 10, KE sent a letter to Additional Secretary (Power Finance), Mehfooz Bhatti, summarizing previous correspondence and reiterating its demand for a Rs 7.43 billion credit note and direct release of future TDC amounts.
Sources reveal that CPPA-G has shown willingness to issue a credit note of Rs 3 billion to KE, suggesting that the remaining amount be discussed with the Power Division. However, a final decision is still pending, and neither the Power Division nor CPPA-G has shared any update on the matter.
'KE contends that since it is paying the full amount against invoices issued by CPPA-G, a credit should be issued to facilitate proper accounting adjustments,' the sources added.
KE has also requested that the Power Division release the additional amount before June 30, 2025.
For FY 2025-26, the subsidy allocated to KE has been reduced by over 28%—from Rs 174 billion in FY 2024-25 to Rs 125 billion. However, an allocation of Rs 1 billion has been earmarked for agricultural tubewells in Balochistan, up from Rs 500 million in the previous fiscal year.
Copyright Business Recorder, 2025
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Express Tribune
6 hours ago
- Express Tribune
Sindh unveils SEPRA plan for cheaper power
Listen to article Sindh Minister for Energy, Planning and Development Syed Nasir Hussain Shah has said affordable electricity for businesses and the public is the vision of President Asif Ali Zardari and Chairman Bilawal Bhutto Zardari, backed by Chief Minister Murad Ali Shah. Speaking at the "Multi-Stakeholders Conference on Competitive Electric Market in Pakistan," he said the Sindh Transmission and Dispatch Company (STDC) and the Sindh Electric Power Regulatory Authority (SEPRA) will ensure cheaper electricity than K-Electric (KE). Power will be generated in Sindh, transmitted through STDC, and priced by the Sindh government instead of the National Electric Power Regulatory Authority (NEPRA). SEPRA's staff has been hired, and its notification will be issued this month. The first supply will target the K-IV project grid, with a focus on economic zones. He said hybrid parks will help reduce tariffs and that Sindh is adopting global models to resolve energy issues. High capacity charges of Independent Power Producers (IPPs) can be tackled by expanding industries. Several IPP deals have been reviewed, bringing relief to consumers. Shah also noted Sindh has no representation on KE's board and has asked the federal government to allow two provincial representatives. The province has signed an agreement with KE for solar power supply and urged the utility to avoid expensive fuel-based electricity when solar is available. The conference, organised by Renewables First and the Pakistan Business Forum (PBF), aimed to shift from the monopolistic single-buyer model to a competitive market. Speakers stressed the Competitive Trading Bilateral Contracts Market (CTBCM), approved by the ECC and NEPRA decades ago but not operational, is key to affordable electricity.
Business Recorder
7 hours ago
- Business Recorder
Pakistan govt alarmed by over Rs6trn losses in state-owned enterprises
ISLAMABAD: Finance Minister Muhammad Aurangzeb has termed as alarming the government figures suggesting that State-Owned Enterprises (SOEs) have incurred losses of nearly six trillion rupees, saying, eight SOEs would be privatised this year. 'This is alarming indeed,' he said, speaking on a calling attention notice in Senate on Tuesday regarding the 'alarming figures revealed in Biannual Performance Report issued by the Finance Division that state-owned enterprises have incurred losses of Rs 5.89 trillion during first half of financial year 2024-2025.' Samina Mumtaz Zehri from Balochistan Awami Party (BAP) was the original mover of the calling attention notice, but was absent from the House when the calling attention notice was taken up on the maiden day of the Senate's 353rd session. Pakistan Peoples Party (PPP) Parliamentary Leader in Senate Sherry Rehman then took up the issue regarding the reported losses incurred by the SOEs. 24 SOEs to be privatised in 3 phases: minister Last year, the revenue was recorded at Rs 12 trillion. 'But 50 percent has been lost as result of losses incurred by the SOEs,' Aurangzeb said. 'This flow is very high—the government is taking different steps to reduce expenditure—like we introduced pension reforms—to cut down on the expenses,' the minister said. He said 24 SOEs have been finalised for privatisation. 'They were referred to the Cabinet Committee on Privatisation, and then finally referred to the Privatisation Commission. Eight SOEs would be privatised this year—the rest would be privatised thereafter,' he said. The Sindh government, Aurangzeb said, is following 'very good' formula of public-private partnership. The chairpersons of the board of directors of the SOEs are being appointed from private sector to involve private sector to improve the affairs at the SOEs, said the minister. 'Three DISCOs (distribution companies) have been put to the process of privatisation—it's yielding good results,' he said. The finance minister said that the cabinet committees on SOEs and rightsizing, under his leadership, are working on the privatisation in 43 ministries and 400 government departments. Aurangzeb said he regularly appears before the finance committees of the Senate and the National Assembly for 'accountability.' Earlier, the Senate unanimously passed the Anti-Dumping Duties (Amendment) Bill, 2025. The bill gives retrospective effect to cover the period from financial year 2020-2021 and onwards to exempt products imported for foreign grant in-aid projects from payment of anti-dumping duty through Anti-Dumping Duties (Amendment), Act 2022. Meanwhile, the opposition senators strongly protested against the convictions of Pakistan Tehreek-e-Insaf (PTI) lawmakers by anti-terrorism courts (ATCs), and walked out of the House. Presently, the Senate is without an opposition leader following the conviction of Shibli Faraz by an ATC in the context of 9 May riots, and his subsequent disqualification from the Senate by the Election Commission of Pakistan (ECP). The Senate was adjourned till Friday. Copyright Business Recorder, 2025
Business Recorder
9 hours ago
- Business Recorder
Stocks stay strong
KARACHI: The Pakistan Stock Exchange (PSX) navigated a turbulent session on Tuesday, closing at a record high despite heavy profit-taking by investors keen to lock in recent gains. The benchmark KSE-100 Index ended just 75.48 points, or 0.05 percent up at 147,005.32 points, as compared to the previous session closing of 146,929.98 points. The index touched an intraday peak of 147,977 points and a low of 146,895 points before ending at record close. BRIndex100 closed at 15,035.17, down 37.65 points or 0.25 percent, with a total volume of 543.26 million shares. BRIndex30 fell 103.75 points, or 0.24 percent, to 42,521.63 points, with 259.14 million shares traded. According to Topline Securities, gains in BAFL, HBL, and SYS added a combined 295 points to the benchmark, partly offsetting losses from FFC, MARI, OGDC, PSO, and BAHL, which together eroded 527 points — underscoring sectoral divergence and investor caution. Market breadth remained negative, with 208 scrips advancing against 242 decliners and 32 remain unchanged in the ready market. Turnover in the ready market rose to 691.65 million shares from 611.20 million in the previous session, while traded value inched up to Rs 44.58 billion from Rs 44.00 billion of yesterday. Yousuf Weaving led the volumes with 46.27 million shares, closing at Rs 6.09. Kohinoor Spinning followed with 39.94 million shares at Rs 6.47, while Invest Bank finished the day at Rs 9.68 on 34.39 million shares. Among the top gainers, PIA Holding Company surged Rs 156.85 to Rs 29,000, and Khyber Textile Mills gained Rs 69.71 to Rs 1,477. On the flip side, Nestle Pakistan fell Rs 88.57 to Rs 8,762.79, while Unilever Pakistan Foods dropped Rs 79.40 to Rs 32,020.61. Sectoral performance was mixed — strength in banking supported the index, while oil, gas, and fertilizer stocks weighed on sentiment. The Oil and Gas sector remained under pressure amid selling in OGDC, PSO, and PPL futures. Market capitalization edged down to Rs 17.524 trillion from Rs 17.529 trillion a day earlier, reflecting the limited net effect of the day's choppy trade. The BR Automobile Assembler Index closed at 23,639.61 points, up 154.78 points or 0.66 percent, with a turnover of 3.12 million shares. The BR Cement Index rose 124.58 points, or 1.1 percent, to 11,483.55 points, on 41.59 million shares. The BR Commercial Banks Index gained 269.64 points, or 0.62 percent, to close at 43,604.32 points, with 92.97 million shares traded. The BR Power Generation and Distribution Index slipped 96.50 points, or 0.42 percent, to 22,765.22 points, on 35.82 million shares. The BR Oil and Gas Index dropped 206.53 points, or 1.54 percent, to 13,197.93, with 56.19 million shares changing hands. The BR Technology & Communication Index added 32.17 points, or 0.98 percent, to 3,329.63, on 42.18 million shares. Ahsan Mehanti of Arif Habib Corporation said the market's strength was underpinned by a robust earnings outlook and rupee stability, while speculation over Pakistan–US trade and investment deals, government moves to secure additional export tariff incentives, and rising business confidence acted as catalysts for the record close. Copyright Business Recorder, 2025
