ISLAMABAD: The Central Power Purchasing Agency–Guaranteed (CPPA-G) has requested the Auditor General to settle an audit para concerning an “irregular payment” of Rs151 billion made to Kot Addu Power Company (KAPCO) due to an unauthorized extension of its Power Purchase Agreement (PPA) without approval from the National Electric Power Regulatory Authority (NEPRA).
KAPCO, privatized in 1996, had its original PPA signed on June 27 of the same year, with a 25-year term. However, disputes over liquidated damages (LDs) and delayed payments led to a complex situation, ultimately resolved through negotiations and the approval of a payment mechanism in 2021. CPPA-G contends that the payments were in line with the Merit Order and approved by NEPRA, asserting no financial loss was incurred by the power sector.
Story by Mushtaq Ghumman
