Hub Power Company (Hubco), the independent power producer which is locked in a dispute with Pakistan’s Water and Power Development Authority (Wapda) to which it provides electricity, reported a loss of $130 million in the financial year to the end of June, the first time it has slipped into the red since it began operations in 1997. The company’s performance has suffered as a result of the lower capacity payments made by Wapda for the electricity it buys from Hubco’s 1292 MW plant near Karachi.
The news emerged after a special meeting in Turkey, a location chosen because a number of directors face possible court cases in Pakistan.
The company, in which Britain’s National Power has a major stake, said it has made a $250 million provision for the disputed amount not paid to it by Wapda. Despite assurances that an early settlement of the three year long dispute would top the agenda of General Pervez Musharraf’s government after seizing power last year, an end to the acrimonious Hubco/Wapda wrangling remains elusive.
Hubco’s chairman, Mohamed Alireza, said he believed that the tariff row, which erupted in early 1998 could be resolved. The World Bank, which is a backer of the $1.5 billion Hub Power project, has been pressing Pakistan to resolve the row.
