NEPRA Fines CPPA Rs. 10 Crore for ‘Forgiving’ WAPDA

The National Electric Power Regulatory Authority (NEPRA) has fined the Central Power Purchasing Agency (CPPA-G) a total of Rs. 10 crore for allowing WAPDA to avoid liquidated damages. The regulator found that CPPA-G failed to enforce provisions that would have imposed liquidated damages against WAPDA, leading to the imposition of the fine.

CPPA-G was instructed to deposit the fine in a bank account within 15 days of receiving the order. The decision also reached the attention of CPPA-G's chief executive officer. The NEPRA chairman recorded a dissenting opinion, suggesting that WAPDA's potential claims for interest on late payments could reach around Rs. 175 billion, whereas CPPA-G claimed a mere Rs.

77 billion in liquidated damages. The chairman argued that enforcing liquidated damages at this point might trigger substantial late payment interest claims by WAPDA, which could add to the country's circular debt. This matter falls under CPPA-G's jurisdiction as the government's central power purchasing and market settlement agency, responsible for procuring electricity on behalf of distribution companies and handling billing, payments, and settlements with power producers, notably WAPDA's hydropower generation.