- Chinese firms overdue payments exceeded $1.2bn.
- If status quo continues, it will be no more sustainable, say Chinese enterprises.
- We are not being paid on time, CPEC firms add.
ISLAMABAD: Power sector firms of China Pakistan Economic Corridor (CPEC) in Pakistan had urged the caretaker government to guarantee timely payments against the sale of electricity to the Central Power Purchase Agency (CPPA) as they had initiated injecting their equity to make them operational, The News reported on Thursday.
Chinese enterprises brought up the issue whilst holding a media talk arranged by Infodor Salon on the CPEC energy sector.
The CPEC power projects are partially paid by the government on and off against the invoices they generate. It is estimated that their overdue payments have now exceeded $1.2 billion.
More importantly, due to the adverse risk profile of the power purchaser, Chinese national insurance company, M/s Sinosure, has reduced its coverage for Pakistan’s projects to 70% from 95% and banks are now asking for 25% coverage from a third party.
“If the status quo continues, it would be no more sustainable for Chinese enterprises to keep their projects fully operational. We are getting some portion of our receivables enabling us to pay loan installments with interest to our lenders,” was the unanimous response by almost all the representatives of the Chinese enterprises in the power sector when asked if they were getting 100% payments on time against the electricity being sold.
“We are not being paid on time and the government has not constituted a revolving fund as desired by CPEC enterprises, bringing us to a point where we do not even have the funds to open LCs for importing equipment critical to ensure maintenance of the plants.”
Earlier, CPEC energy enterprises including Power China Pakistan, China Three Gorges South Asia Investment Ltd, China Energy International Group Company Limited Pakistan Branch, China Power Hub Generation Company (PvT) Ltd, China Electric Power Equipment and Technology Company, China Machinery Engineering Corporation, Huaneng Shandong Ruyi (Pakistan) Energy (Pvt) Ltd briefed the media persons about their respective power projects and their contribution towards Pakistan’s economy and for the well-being of the people under corporate social responsibility (CSR).
They also highlighted their contribution towards sustainable climate-friendly initiatives under the Corporate Social Responsibility.
The representatives of Chinese enterprises also suggested the government ensure stability in the country, paving the way for consistent economic policies, apart from ensuring security to all Chinese project sites and market liberalisation.
“If the state manages to do that, then more investment from China and other countries, including the Middle East, would come to Pakistan,” they said.
At the outset of the media talk, Fahd Gauhar Malik, a young entrepreneur of one of the media houses, said that the theme of Infodor Salon on CPEC is based on 3Rs approach – Research, Resonate, and Rethinking.
He assured maximum cooperation to media persons from the platform of All Pakistan Chinese Enterprises Association for nullifying the fake news that appear off and on to help create a positive narrative about the CPEC projects.
The News and Media Director of All Pakistan Chinese Enterprises Association, Su Dong, asked the government to ensure stability in the country paving the way for consistent economic policies, apart from ensuring security to all Chinese project sites, and market liberalisation.
“If the state manages to do that, then more investment from China and other countries including the Middle East would come to Pakistan,” he said.