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Chinese companies warn of shutting down power plants in Pakistan

The Chinese companies warned that if the government does not pay the dues, then their power plants would shut down within days. If the power plants shut down, then Pakistan will face a serious electricity shortage.

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Chinese independent power producers (IPPs) have warned Pakistan that they may have to shut down their power plants if the government does not pay the outstanding dues. Important to note that Pakistan owes Rs. 300 billion to the Chinese companies.

Minister for Planning and Development Ahsan Iqbal had a meeting with more than 30 Chinese companies operating under the flagship multi-billion-dollar China-Pakistan Economic Corridor (CPEC) in various areas including energy, communication, railways, and others.

According to media reports, complaints from both sides on a number of issues dominated the greater part of the meeting. Chinese companies complained about complex visa procedures for Chinese executives and taxation. Meanwhile, the Pakistani side complained about delayed response to their communications.

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However, what’s more concerning is the fact that the Chinese power companies warned that if the government of Pakistan does not pay the dues, then the plants would shut down within days. To clarify, the companies need the payments to purchase fuel. Without the fuel, their current stock would deplete and they would not be able to generate power anymore.

Moreover, they complained that fuel prices, particularly that of coal, had gone up by three to four times, which meant they should at least be given three to four times greater liquidity to make fuel arrangements.

More load-shedding?

The Chinese power companies’ warning is indeed alarming for Pakistan. If the power plants shut down, then Pakistan will face a serious electricity shortage, leading to even more load-shedding.

Many cities in Pakistan are already facing long hours of power outage which is adding to the misery of the people, especially in this heat. Prime Minister Shehbaz Sharif had earlier announced that load-shedding will end from May 1st.

Read more: PML-N’s failure to overhaul transmission & distribution network responsible for load shedding in Ramadan

However, 10 days later, there is still no respite as cities continue to face daily load-shedding. In fact, the power cuts range from four to six hours in the day and two to four hours at night

Moreover, the power shortage comes at a time when a heatwave is predicted in the nation. The Pakistan Meteorological Department (PMD) predicted another spell of extremely hot weather. It advised the general public to avoid unnecessary exposure to direct sunlight and to use water judiciously.