Beijing has voiced serious concerns about $1.5 billion in overdue paymentsto CPEC independent power plants (IPPs), as well as currency exchangerestrictions imposed by the State Bank of Pakistan.
In a letter to the Planning Commission on March 13, 2023, Special Assistantto the Prime Minister (SAPM) (Coordination) Syed Tariq Fatemi stated thatChina’s Charge d’Affaires Pang Chunxue met with him and expressed concernabout the CPEC power projects, reported Express Tribune.
The SAPM said, “Overdue payments to the Chinese IPPs currently stand at$1.5 billion. This is causing huge concern among Chinese businesses”,adding that “these power plants require specific-grade coal for electricityproduction. If the same is purchased from the local spot market, then NEPRArequires that the price should not be higher than the price of importedcoal, which is not feasible due to exchange rate fluctuation/ rupeedevaluation”.
China’s Pang Chunxue told Fatemi that there were gaps between the revolvingfund formed by Pakistan and the revolving account agreement that it signedwith China. She also said the power plants were operating at less than fullcapacity due to difficulties in obtaining the required amount of coal forpower production. Many Chinese companies were having difficulty clearingcustoms at Karachi Port due to import curbs.
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Chunxue suggested that all these concerns could have been addressed injoint committee meetings had the sessions continued since the committee’slast meeting in December 2022.
