ISLAMABAD:* Port Qasim Electric Power Company (PQEPC) has warned the government of a potential suspension of plant operations due to prolonged payment delays, stating that it could halt production without incurring liquidated damages (LDs) under its Power Purchase Agreement (PPA).
The *1320 MW coal-fired plant, a key China-Pakistan Economic Corridor (CPEC) energy project, is among several Chinese-backed power plants facing severe financial strain. Total outstanding receivables for CPEC coal plants *exceed Rs 300 billion (over *$1 billion), hampering dividend payments to shareholders and stalling approvals for *new loans and insurance agreements.
In a letter to Finance Minister *Senator Muhammad Aurangzeb, PQEPC *CEO Wang Dongfang emphasized that despite consistent power supply and efforts to curb *circular debt, the company’s dues had surged to **Rs 93.5 billion ($334 million) as of February 26, 2025, with a **six-month payment backlog. Shareholders from *China and Qatar have expressed serious concerns and are demanding urgent resolution.
Wang highlighted that under *PPA Section 9.10, the company has the right to *suspend plant operations due to unpaid dues, warning that a shutdown would be a lose-lose situation for both sides. He urged the immediate release of funds to prevent disruptions, potential *Loan Agreement Defaults, and *GoP Sovereignty Guarantee Defaults.
In response, the Finance Division has disbursed Rs 18 billion to the Central Power Purchasing Agency-Guaranteed (CPPA-G) for energy subsidies, including tariff differentials, agricultural tubewell subsidies in *Balochistan and AJ&K, and a **23rd tranche under the Pakistan Energy Revolving Account, benefiting Chinese IPPs. However, industry sources warn that without *full payment clearance, the risk of plant shutdowns and energy shortages remains critical.
Story by Mushtaq Ghumman
