Pakistan waives off $1.26M duty on Turkish energy company


KARACHI: Pakistan on Wednesday waived all port charges of Rs194.95 million ($1.26 million) imposed on Turkish power rental company, following the resolution of a nearly decade-long dispute. 
The amount was much smaller than the fine of $760 million plus interest, which Pakistan would have to pay to Karkey Karadeniz Elektrik Uretim had no agreement been reached.
“The waiver was a consequence of the settlement agreement reached between the government of Pakistan and Karkey,” the Ministry of Finance said in a statement on Wednesday.
The settlement was announced in November, when Prime Minister Imran Khan said his government, with the help of Turkish President Recep Tayyip Erdogan, had “amicably resolved” the Karkey dispute, saving Pakistan from the penalty imposed by the International Center for Settlement of Investment Disputes (ICSID), an international arbitration institution under the World Bank.
The penalty was imposed following Pakistan’s decision to terminate the contract it signed with Karkey in 2009.
Karkey was one of the power companies awarded contracts by the Pakistani government in 2008 and 2009 to address the country’s energy crisis. It brought its powership to Karachi to supply the national grid, but failed to generate the agreed amount of power.
When Pakistan terminated the contract, Karkey appealed to the ICSID to seek compensation for the losses incurred by its vessels and won the case.