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CPEC power projects: China concerned over payment issues

Chinese companies working on power projects, initiated under China Pakistan Economic Corridor (CPEC), are still facing financial woes despite Prime Minister’s repeated assurances, well informed sources told Business Recorder.

The Chinese government through Pakistan’s embassy in Beijing and its own embassy in Islamabad has raised this issue at all forums. Chinese insurance company M/s Sinosure is also unwilling to insure new financing for power sector projects due to failure to meet contractual obligations of companies that have already established projects.

Official documents available with Business Recorder reveal that Sindh Engro Coal Mining Company (SECMC) has informed Power Division that due to significant delays in the opening of Letter of Credit (L/Cs) and foreign remittance, its mining operations are severely impacted.

SECMC is also incurring demurrage charges, liquidated damages and penalties due to delay in approvals, which are also resulting in damage of reputation, as well as, additional cost.
SECMC is continuously engaged with banks but significant amount is still pending.

Our O&M contractor has now communicated that due to significant delay in their payment they are unable to continue mine operations. We request your immediate intervention to support remittance of payment to our Chinese O&M contractor; otherwise, mine operations will stop with immediate effect,” said Amir Iqbal, CEO SECMC in his letter to Secretary Power.

Shutting down the operations of the mine will lead to shut-down of the four power plants operating on Thar coal namely, Engro Power Thar Limited (EPTL 660 MW), Thar Energy Limited (300 MW), Thal Nova Power Thar(Pvt.) Limited (330 MW) and Lucky Electric Power Co(660 MW). Equivalent power capacities operated on imported coal will result in additional forex burden of $ 85 million per month on the economy and will also result in three times more expensive power generation, he added.

Meanwhile, Port Qasim Electric Power (Pvt.) Co (PQEPC) has informed the government that both its units of 1320 MW are about to shut down as a direct result of the default of GoP’s obligations.

According to the power company, currently due to outstanding foreign exchange requests with the State Bank of Pakistan (SBP), the coal supplier discontinued shipments after January 2023. The shortage of coal has cause significant financial strain for the company as the coal inventory has been fully depleted, causing a shut down of both units resulting in capacity payments deductions.


Chinese Charge d’ Affairs to Pakistan, Pang Chaunxue, in a letter to Minister for Power Khurram Dastgir Khan has shared the concerns of Chinese companies that have established power projects under CPEC initiative.

According to Pang Chaunxue, CPEC coal-fired power plants now face difficulty in buying coal due to foreign exchange restrictions including Port Qasim Power Plant which has shut down as its coal has run out. Meanwhile, the capacity payments deduction is still pending resolution which means the company could not get electricity payment, or the capacity payment, and is facing a very difficult situation.

The company has Embassy’s help to coordinate with the competent forum to solve difficulties, he said, hoping that the Minister for Power could play a leading and coordinating role and introduce measures to solve the capacity payment deduction issue, etc.

“This year marks the 10th anniversary of CPEC. I believe that under your guidance (Power Minister), these issues can be solved in a proper way. We will jointly promote the high-quality development of CPEC and serve Pakistan to improve its economy and export competiveness,” said Pang Chunxue.

Islamabad has shown willingness to amend/ modify Pakistan Energy Revolving Account (PERA) to sort out concerns of Chinese lenders of CPEC IPPs with respect to payment in future.

The sources said, in addition to CPEC projects, other IPPs, public sector power generation plants, Pakistan State Oil (PSO), SNGPL and SSGCL, PPL, etc., also are facing serious financial constraints due to non-payment by CPPA-G due to which circular debt is now over Rs 2.6 trillion.

Good. They took high returns for higher risk..not getting paid on time wa part of risk and thus the very high returns
 
They should then spend their money in Somalia next! Lol
China is not interested in far off places. Their focus in Indian ocean area is mainly on Pakistan, Sri Lanka, Bangladesh and Myanmar. They are in dominant big brother position in all four. They are also influential in Nepal. They are getting the best bang for their buck.
 
China is not interested in far off places. Their focus in Indian ocean area is mainly on Pakistan, Sri Lanka, Bangladesh and Myanmar. They are in dominant big brother position in all four. They are also influential in Nepal. They are getting the best bang for their buck.

That always intrigued me. Access through Myanmar would have been much simpler and closer to their Industrial areas. Why go through all that incredibly tough terrain and long distance? The risk, also, would have been lesser.
 
They Chinese are idiots to invest in the world"s most corrupt nation of Faujistan.
Chinese are actually clever, they bought out tangible assets and natural resources in Pakistan for pennies. A nation of 200 million will be held hostage to Chinese whims and fancies for a generation or two.
 
A nation of 200 million will be held hostage.
No such thing. Pakistan treats PRC as a demigod that occupies the same pantheon as Saudi Arabia and UAE. Just because I take my dog for a walk leashed, he doesn't think he is being held hostage.
 
No such thing. Pakistan treats PRC as a demigod that occupies the same pantheon as Saudi Arabia and UAE. Just because I take my dog for a walk leashed, he doesn't think he is being held hostage.

A dog leashed is still a dog leashed.
 
Well for me the only saving grace is the Chinese can actually force clean governance on Pakistan because the people demand it, unlike the Americans who would rather have the colonial army shoot protestors than create actual change. Another benefit is a big F U to the d0theads shitting on this thread like it’s a Mumbai railroad and it’s morning time. Good! Hope China builds a massive naval base. I mean Pakistan Army and Air Force can hold their own against the fugly rats in the east, but navy is the weakest branch. It’s win win for Pakisan!

Imagine proclaiming you’re a superpower of SA with a high forex but can’t even project power onto broke nation of Pakistan. Once a coward, always a coward. It explains why small Islamic armies easily whooped your stinky Ganges shit River bathing asses
 
Well for me the only saving grace is the Chinese can actually force clean governance on Pakistan because the people demand it, unlike the Americans who would rather have the colonial army shoot protestors than create actual change. Another benefit is a big F U to the d0theads shitting on this thread like it’s a Mumbai railroad and it’s morning time. Good! Hope China builds a massive naval base. I mean Pakistan Army and Air Force can hold their own against the fugly rats in the east, but navy is the weakest branch. It’s win win for Pakisan!

Imagine proclaiming you’re a superpower of SA with a high forex but can’t even project power onto broke nation of Pakistan. Once a coward, always a coward. It explains why small Islamic armies easily whooped your stinky Ganges shit River bathing asses

What incentives does Chinese have to clean up Pakistani political ecosystem?
 
CPEC is between Pakistan and China, none of the business of you ignorant dirty people.

Shenzi pinkie... go parade in front of your Xichod master.

Before you call us dirty... look at your wumao brothels where you come from..

reported... wumao alert...
why does this forum continue to keep you wumaos is beyond me.
 
Shenzi pinkie... go parade in front of your Xichod master.

Before you call us dirty... look at your wumao brothels where you come from..

reported... wumao alert...
why does this forum continue to keep you wumaos is beyond me.
Just go get lost from my posts, this forum is not specifically for you ugly whore to insult Chinese as you wish. I and Chinese dont want to have anything to do with you fools, go hide in your shithole.
 
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Just go get lost from my posts, this forum is not specifically for you ugly whore to insult Chinese as you wish. I and Chinese dont want to have anything to do with you fools, go hide in your shithole.

Shenzi....

hmmm.... since your wumao pinkies brothels are a challenge you see others like you..... go and parade in the transvestite pinkie dress....

little pinkies ... funny... homos in wumao... wow..
 
Shenzi....

hmmm.... since your wumao pinkies brothels are a challenge you see others like you..... go and parade in the transvestite pinkie dress....

little pinkies ... funny... homos in wumao... wow..
Yeah, you are an ugly whore living in a shithole brothel place, thats why you love so much to keep that in your fools mind all the time. Just get lost from me, are you that thick faced. Go dance like low life animals you are good at.
 
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Yeah, you are an ugly whore living in a shithole brothel place, thats why you love so much to keep that in your fools mind all the time. Just get lost from me, are you that thick faced. Go dance like low life animals you are good at.
keep posting such things.... i am collecting what you write and already we threw out chinese bidder for our project after presenting one of your racist tirades.

go frolick with your homo pinkies...
 
keep posting such things.... i am collecting what you write and already we threw out chinese bidder for our project after presenting one of your racist tirades.

go frolick with your homo pinkies...
I dont give a dam for what you whores would do. You think Chinese should put up with all your racist bigotry tirades against them and say nothing, what a low life to call others racist while youself are the worst kind in the first place, really low life without any sense of shame. In fact, I want China to have nothing to do with such ugly people in soul.
 
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