PEPCO Debt Remains Unresolved
Pakistan government has not been able to implement Asian Development Bank’s (ADB) ‘Forward Plan’. According to this plan, Pepco’s debts of Rs 261 million had to be transferred to the newly established Power Holding Company Limited (PHCL) by September 30, 2009.
Munawar Baseer Ahmad, ADB-CDTA team leader, in a letter, titled ‘Pakistan Power Sector Debt Resolution Plan’ (PSDRP) to Special Secretary, Finance, Asif Bajwa, stated that the government would have to take addtiional steps to bring the plan back on track.
“We have reviewed the status and progress with Martin Endelman, Principal Financial Sector Specialist, ADB, Manila, and it has been noted (that) certain time bound actions have not been completed by the target dates due to other priority actions of the Finance Ministry,” sources quoted Baseer as saying in the letter. According to him, the focus was completion of the issuance of Rs 90 billion Term Finance Certificates (TFCs).
According to the ADB, non-completion of the debt transfer from Pepco and Wapda to the PHCL by September 30 require the following essential actions: (a) consent of banks to extend date of transfer beyond agreed date of Sept, 30, 2009; and (b) obtaining extension by Pepco from SECP for account closing by September 30 and AGM by October 30 (Statutory requirement of one month from account closing).
Further, ADB has envisioned that on completion of the Rs 90 billion transaction, Finance Ministry will be able to re-focus on the essential actions as per the ‘Forward Plan’.
