Tag Archives: assurances

Pakistan is defaulting on sovereign debt

Power sector dues: Govt defaults on sovereign guarantees

By Shahbaz Rana

ISLAMABAD: Failure to honour its financial commitments to Independent Power Producers (IPP) has led to the first-ever sovereign default by the government in Pakistan’s history.

The default on sovereign guarantees – assurances the government provides to foreign investors – may not only unnerve the financial markets, but also downgrade the government’s creditworthiness, making it more expensive to borrow money.

“Today, the government of Pakistan has committed a sovereign default for the first time in the history of the country”, announced the IPPs Advisory Committee here on Tuesday.

“The government has defaulted on payments of roughly Rs45 billion to nine IPPs that generate 1,700 megawatts of electricity”, said Abdullah Yusuf, Chairman IPP Advisory Committee while talking to The Express Tribune. These nine IPPs started operations in 2004 and their total receivables amount to almost Rs232 billion.

Taking legal course

The IPPs gave a 30-day payment notice to the power purchaser, the Central Power Purchasing Agency (CPPA), followed by a 10-day notice to the government. Neither the CPPA nor the government cleared the overdue amounts, said the advisory committee.

The IPPs have exhausted all avenues available and the notice served to the government expired on Tuesday, the committee said.

After the default, the IPPs have issued a legal notice to the government for recovery by Thursday, May 10th, 2012 failing which the IPPs will follow a legal course.

Yusuf said the IPPs will go to the Pakistani courts.

“The default is a very serious matter and carries negative implications for the country”, Yusuf added. ….

Read more » The Express Tribune

MQM in the way of plot against Pakistan: Altaf

– By Azfar-ul-Ashfaque

Excerpt;

…. The gist of the press conference was that Western powers were plotting the dismemberment of Pakistan, but the Muttahida had resolved to foil the design.

Repeated assurances were made to the armed forces, the Inter-Services Intelligence as well as the nation that the MQM was against conspiracies being hatched against the country.

Mr Hussain chose not to answer the serious allegations levelled by former Sindh home minister Dr Zulfikar Mirza against him and his party over the past fortnight, parrying a number of questions by reporters.

He concentrated on showing documents, maps and reports from the international media to strengthen his contention that international powers were working for the break-up of Pakistan.

Although he refused to pinpoint the international powers he was referring to, an allusion left no doubt: “The country which has the biggest influence in Pakistan is behind such conspiracies”. The MQM cannot fight such powers alone, Mr Hussain added. “There would have been no super power had the army, the ISI and the MQM got united.”

The MQM supremo accused the leadership of the Awami National Party of “misleading the Pukhtoons living in Karachi and Peshawar”. He even went to the extent of claiming that the United States had given millions of dollars to Asfandyar Wali for contesting the 2008 general election. ….

Read more → DAWN.COM