In a surprising development, The Express Tribune’s website has deleted an article by journalist Shahbaz Rana about the German Ambassador’s letter to Chief of Army Staff (COAS) Gen Asim Munir urging his intervention over the termination of an IPP deal.
Although the article is still available in print and e-newspaper, it cannot be found anywhere on the website. Netizens wondered about the sudden disappearance of the article while also archiving it on social media.
Shahbaz Rana revealed in the story that German Ambassador Alfred Grannas wrote to the army chief after German investor Siemens was allegedly forced to agree to a settlement for shutting down a 450 MW power plant. However, the government maintains that the agreement was a mutually negotiated settlement rather than a coerced decision.
Rana wrote: “Siemens holds a 26 percent stake in Rousch Pakistan Power Limited, one of the five power plants whose contracts were terminated this month in an effort to reduce electricity costs by 60 paisa per unit. Germany, however, hasn’t accepted this termination but is willing to end the contract if Pakistan meets at least six conditions.”
The German ambassador, in his letter to the COAS, stated that the “unusual manner in which these negotiations continue to be conducted is already damaging the trust of German enterprises and investors.”
The German investor has proposed six conditions for an amicable resolution. First is the guarantee from the Ministry of Finance and the State Bank of Pakistan to ensure all settlement funds, currency transfers, historic and future dividends be transferred to German bank accounts. Secondly, the German investor seeks the resolution of a sales tax dispute with FBR and the withdrawal of all pending legal proceedings against the plant.
Thirdly, it proposed that after the handover, Siemens seeks release from any ongoing maintenance or preservation obligations for the complex.
Fourthly, an amendment in the indemnification clause in the settlement agreement should be made to include protection for all board directors.
Fifth, board members and shareholders must be indemnified, defended, and held harmless from and against any claims or taxes related to the project and its termination. Lastly, an immediate transfer of Rs. 3.1 billion in dividend arrears to Germany as a gesture of good faith.
It should be noted that the Rousch power plant contract has been renegotiated three times since 2000, each time resulting in less than guaranteed dividend payments to investors and shareholders.
