Chinese IPPs circular debt: Outstanding amount rises to Rs350bn

ISLAMABAD: The current outstanding payment on account of circular debt for Chinese Independent Power Producers (IPPs) has risen up to Rs350 billion with growing demands to clear the backlog.

“The outstanding backlog of Chinese IPPs stands at Rs350 billion, which is being accounted at the rate of 14% while the remaining 86% is being paid regularly. The CPPAG stated that it will be further improved,” it was announced during a CPEC review meeting held here on Friday.

Planning Minister Ahsan Iqbal chaired the meeting and discussed progress on Special Economic Zones, ML-1, KCR and various new development initiatives to be discussed by the Joint Working Groups (JWGs).

According to sources, without achieving any substantial progress towards finalizing the financing plan for the construction of the much-awaited ML-1 project, the CPEC progress review committee was informed that the Chinese side was working on financial mechanism for this multi-billion-dollar project.

“A Joint Financial Committee meeting on ML-1 is expected during the ongoing month to finalise the terms and kick-start the Package-1 of ML-1,” top official sources were quoted as saying in the meeting.

The Chinese side requested Pakistan to share the updated feasibility study of the Karachi Circular Railway (KCR) as the feasibility study carried out in 2017 has become outdated. The Government of Sindh was asked to share the KCR updated feasibility study. The Sindh government representative assured to discuss the matter with consultants and give timelines for updating the feasibility within 15 days.

The planning minister emphasized the importance of enhancing Pakistan’s exports and directed following up on the PM’s proposal to China to attach its professionals to help develop Pakistan’s export sector during his visit to China. He said the top priority of the government’s 5Es agenda was to enhance exports, and Pakistan could benefit from Chinese expertise in this regard.

The updated status of Special Economic Zones (SEZs) was also discussed wherein the minister instructed to make the SEZs a medium to enhance exports. He said SEZs could foster collaboration and innovation, which could lead to development of new products and services better suited to demands of international markets.

The meeting also discussed proposals for the upcoming Joint Working Group (JWG), including Advanced Metering Infrastructure (AMI) Solar Projects and identification study of pumped storage hydropower projects. Ahsan instructed the authorities to review all matrix and present progress updates.

In addition, he discussed ML-1 and KCR projects. “We are committed to the CPEC development and ensuring its successful implementation,” said the minister. “We are taking all necessary steps to address the pressing issues and enhance exports, and we are grateful to China for its continued support in this regard.”

The meeting concluded with an emphasis on the need for close collaboration between Pakistan and China to ensure successful implementation of the CPEC and achieve the common goal of regional prosperity.