On December 7, 2018, Wang Yundan, Chairman SEP and Chief Executive of M/s Abraaj Group, Arif Naqvi along with Chairman KE, Tayyab Tareen called on the Prime Minister and complained that undue hurdles are being created in deal on KE. The government team comprised of Finance Minister Asad Umar, Power Minister Omar Ayub and Planning Minister Makhdoom Khusro Bakhtiar. Minister for Privatisation, Muhammad Mian Soomro and Prime Minister''s Advisor on Commerce, Textile, Industries and Production and Investment who has been assigned the responsibility of resolving KE sale purchase issues were not present in the meeting.
According to sources, SEP and Abraaj''s unwillingness to share their Sale Purchase Agreement (SPA) with the government of Pakistan including Ministry of Defence is one the key reasons for the delay in issuance of NSC. In addition, disagreement between the KE and government on KE liabilities is also hindering smooth sale of shares to SEP, which is informally taken over the power utility.
"The PC had requested KES Power for provision of SPA between KES and SEP signed on October 28, 2016. The Ministry of Defence (MoD) and Nepra also requested for SPA. However, KES Power argued that the SPA is between two offshore companies and does not require sharing with any government entity. Therefore, KES Power has refused to share the copy of the SPA to the PC," the sources added. Prime Minister''s Advisor has held at least two or three meetings of a committee constituted by Finance Minister Asad Umar but could not find any way out. Power Division says that it has already sent ToRs of agreement to the KE management, but the reply is still awaited. Privatisation Commission has also sided with the Power Division and Petroleum Division, saying that issue relating to K-Electric''s liabilities towards GoP entities i.e. SSGC and NTDC / CPP etc. should be resolved, prior to the formal takeover by SEP of KE operations.
"Privatisation Commission maintains that draft ''Deed of Undertaking'' as proposed by the SEP in its existing form and clauses related to lien/pledge and transfer to its affiliates are not in accordance with the Original SPA," the sources continued.
On December 7, the Prime Minister had directed his Secretary to sort out KE issue within two weeks which implies this week or maximum next week KE''s issue will be settled. KE which is already getting 650 MW electricity from the national grid without any SPA is also actively pursuing the federal government for additional 300 MW electricity. In this regard a meeting was held last week in the Power Division.
The sources said Power Division has agreed in principle to supply 300 MW additional electricity to KE after approval from Board of CPPA-G and NTDC. "As boards of CPPA-G and NTDC clear the proposal, it will be submitted to the ECC for final nod," the sources maintained.