KE agrees to govt conditions to resolve longstanding payment disputes

KARACHI: The K Electric in order to resolve over-due payment related matters between the Government of Pakistan and itself, in a concession bid after the discussions remained in a stalemate, has agreed to drop its earlier conditions of getting the arbitration done from London, and the reciprocity condition via which it would have demanded interest from government, ARY News reported on Thursday.

The city’s sole power distributor has conceded to conditions put forward by the government as it has now agreed to get the arbitration done locally instead from London. Furthermore, it has scrapped the principle of reciprocity via which, it’s reported, would have demanded interest payment from the government.

In a letter that KE wrote, bearing its CEO’s signature, to the power division dated two days back, the power distributor gives the backdrop of an earlier meeting between the GoP and KE to “discuss a resolution to the historic disputes” via arbitration process and says it is ready to update the draft Terms of Reference (ToRs).

KE tells the power division it has updated draft

ToRs in line with Secretary Power’s guidance in meeting held on January 25 and has agreed to remove the “principle of reciprocity” included in previous draft ToRs and that the arbitration is to take place in Pakistan rather than in London.

It is pertinent to note that GoP will not be liable to pay interest amount on payables with reciprocity condition being now scrapped. The power distributor expects to receive a due amount of Rs250 billion collectively from federal and provincial entities.

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On the other hand, the power distributor is also liable to pay a principal amount of Rs159 billion to National Transmission and Despatch Company (NTDC) and to gas utility provider Sui Southern Gas Company it shall be Rs13.7 billion.

SSGC, it may be noted, demands Rs120 billion from  KE which is the some after the accumulation of interest amount accrued on the principal receivable.

A source has however said that after these concessions in the ToRs by KE, the chances of resolution on long pending disputes have increased.