KARACHI – The State Bank of Pakistan (SBP) is facing complaints from a Chinese company, Pak Matiari-Lahore Transmission Company (PMLTC), over delays in foreign exchange approval needed for debt servicing.
According to a local report, the President and CEO of PMLTC raised the issue during a meeting with Power Minister Sardar Awais Leghari. The company stated that under their Transmission Service Agreement (TSA) and Land Lease Agreement (LLA), the National Transmission and Dispatch Company (NTDC) is responsible for securing and transferring land rights for the HVDC transmission project. However, key parcels of land have not been transferred, affecting the project’s progress.
The agreement requires monthly Transmission Service Payments, but delays of four to five months are common. With an 84.5 percent recovery rate, the funds are only enough for debt servicing and essential operations, leaving nothing for dividends, impacting shareholders and investors.
PMLTC officials mentioned that SBP’s approval for foreign exchange has been limited or delayed. The company has around $53 million in bank accounts awaiting SBP approval. They need to deposit an installment of principal and interest into the Debt Service Reserve Account as per their Facility Agreement. Despite repeated attempts, they have been unable to get SBP’s approval, resulting in a default on their Facility Agreement with the project’s lender.