Nepra hiring firm to conduct Halmore’s forensic audit
ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) is in the process of hiring a firm to conduct forensic audit of 225 MW Halmore Power Company which had refused to agree on the revised terms dictated by the government through the task force on power.
This information was shared by Nepra Chairman Waseem Mukhtar during a public hearing on Wednesday on the joint tariff petitions filed by the CPPA-G, 165 MW Attock Gen Power Company and 185 Foundation Power for revision in conditions of Power Purchase Agreements (PPAs) for hybrid take and pay model. In December 2024, Islamabad had received a formal notification regarding a claim from the owner of Halmore Power Company. This claim is made pursuant to the Bilateral Investment Treaty (BIT) between Pakistan and the United Kingdom and Northern Ireland, aimed at promoting and protecting investments. The notification is dated November 30, 1994. British High Commission also raised the issue of Halmore with the government.
On Wednesday, the chairman Nepra was asked about the latest position of hiring of forensic audit of Halmore Power Company and Orient Power, as the power sector Regulator had given an advertisement in the media seeking applications from the forensic audit of an IPP (without mentioning the name of M/s Halmore). Also at a recent public hearing, CPPA-G Chief Executive Officer, Rihan Akhtar stated that M/s Orient Power is not agreed to the offer of federal government, so it will also face forensic audit. The chairman Nepra replied that hiring of forensic audit firm is in process, however, he did not mention if the firm will conduct forensic audit of only one power company or both.
The documents displayed by Nepra during public hearing, indicate that the parties requested the implementation of Clause 3.2 of the Amendment Agreements. The clause states that the revised tariff will be effective upon notification and withdrawal of NEPRA proceedings against the company for abnormal profits. If these conditions are not met, past excess adjustments for fuel and O&M will be set aside. The GoP agreed to unconditionally and irrevocably withdraw and extinguish all claims against IPPS under the Arbitration Submission Agreement.
The GoP and IPPs are in process of sending joint communication to the tribunal established under the ASA for termination/relinquishment of the arbitration.
O&M indexation: (i) local (indexation shall be lower of (a) 5 per annum or (b) average NPCI for the preceding 12 months: (ii) foreign (a) indexation shall be as per the existing mechanism provided that the PKR/ USD depreciation shall be allowed only to the extent of 70 per cent of actual depreciation per annum; and (b) 100 per cent appreciation shall be passed on to the consumers.
Cost of Working Capital(CWC) (only FPDCL: (i) sales tax currently included in the existing CWC component shall be removed;(ii) the spread over Kibor on CWC has been revised from 2 per cent to 1 per cent; and (iii) the revised CWC in future shall be indexed at KIBOR +1 per cent.
Insurance: the maximum limit of insurance component shall be capped at 0.9 per cent of allowed EPC cost. Foreign RoE components: (i) the foreign component of RoE and RoEDC for October-December 2024 quarter shall be recomputed at a 17 per cent return using a fixed exchange rate of Rs 168/USD. MUSHTAQ GHUMMAN
