The NTDC will pay the court proceeding charges of 245,688 British pounds       Patrind Hydro Power Project seen in this undated photo. — Star Hydro Power Limited (SHPL)

ISLAMABAD: A Korean firm has won the case against the Government of Pakistan in the London Court of International Arbitration (LCIA) for the inclusion of escalated cost in the true-up tariff and failure of NTDC in evacuating electricity from 147 MW Patrind Hydropower Project after achieving COD (commissioning of date).

Secretary Power Division, when contacted, confirmed to The News that the Korean firm has won the case. However, the Managing Director of PPIB (Private Power Infrastructure Board) did not respond to calls about the defeat of NTDC.

The LCIA awarded NTDC penalty to pay Rs690.568 million. Besides the NTDC will pay the court proceeding charges of 245,688 British pounds.

In the wake of no required action by the then PTI government to resolve the issue of inclusion of escalated cost in true-up tariff, the Korean investors in June 2022 moved the London Court of International Arbitration (LCIA) against the Government of Pakistan, seeking $94 million (Rs19.6 billion) as compensation.

The Korean investors pleaded National Transmission & Despatch Company (NTDC) failed to evacuate electricity from the 147 MW Patrind Hydropower Project for at least six months from the COD of the project and also the cost incurred on construction of a point from where the electricity was to be delivered to the national grid.

However, the delivery point, which was not desired by NTDC, was constructed by a Korean company Star Hydro Power Limited (SHPL), which caused an increase in the cost of the project not reflected in the true-up of the electricity being generated by the Patrind Hydropower Project. The NTDC didn’t raise any objection when the Korean company constructed the electricity delivery point which the state-owned entity didn’t want.

Patrind Hydro Power Project has been operational since November 2017. Hydropower projects, under the 2002 policy read with Nepra’s Mechanism for Determination of Tariff Hydropower Projects, have three-tier cost-plus tariff determination processes i.e. Feasibility Stage, EPC Stage and COD Stage true-up.

The project company, through CPPA-G, had submitted a petition before Nepra’s determination of the COD stage tariff with a total cost of $420.127 million. Nepra, however, approved the COD stage tariff on July 29, 2020, with a total cost of $326.261 million. The company filed a review petition before Nepra on August 28, 2020, which is pending to date.