The National Electric Power Regulatory Authority (NEPRA) has fined the Central Power Purchasing Agency-Guarantee (CPPA-G) Rs. 100 million for failing to impose liquidated damages on WAPDA.

According to NEPRA’s order, CPPA-G did not enforce the relevant provisions requiring it to recover liquidated damages from WAPDA, leading the regulator to impose the penalty.

NEPRA has directed CPPA-G to deposit the fine in the designated bank account within 15 days of receiving the order. The decision has also been conveyed to CPPA-G’s chief executive officer.

However, the NEPRA chairman issued a dissenting note, warning that enforcing the liquidated damages at this stage could create a much larger financial liability for the power sector.

The dissenting note states that WAPDA’s potential claims for late payment interest are estimated at around Rs. 175 billion, while CPPA-G’s liquidated damages claims against WAPDA are approximately Rs. 77 billion.

The chairman noted that enforcing the Rs. 77 billion in liquidated damages could prompt WAPDA to pursue its much larger late payment interest claims.

He further observed that the resulting net financial burden could eventually become part of circular debt, which would not serve the broader interest of the power sector.

CPPA-G serves as the government’s central power purchasing and market settlement agency. It procures electricity for distribution companies and manages billing, payments, and settlements with power producers.

Under the existing framework, CPPA-G also handles the commercial side of power purchase arrangements related to WAPDA’s hydropower generation.