OUR STAFF REPORTER KARACHI Four independent power producers (IPPs) have threatened the government to suspend power supply of 825MW if their dues were not cleared. The IPPs sent a letter on Monday to the Pakistan Electric Power Company (PEPCO) and gave warning to concerned authority that it remaining dues should be paid within one month otherwise power supply of 825MW would be suspended. The IPPs also gave 30-day deadline to PEPCO to clear Rs 16.5 billion dues. The notice period of 30 days given by four IPPs before invoking sovereign guarantee has ended on 13 June 2011 and it is likely that these IPPs will invoke the sovereign guarantee today (14 June 2011) after which the government is bound to clear the dues within 10 business days, according to the industry sources. The sources said that the four major Independent Power Producers (IPPs) in the country, Nishat Chunian, Nishat Power, Liberty and Atlas Power, had issued a notification demanding sovereign guarantee from the government as the government has long been overlooking their problems and they had no other option left. Sovereign guarantee is considered to be the last stage when a company seeks guarantee of satisfaction from the government in case of its bankruptcy. The total outstanding dues of these IPPs were more than Rs 16.4 billion as on May 13, 2011 out of which Rs 10 billion are yet to be cleared. Sources said that this has been the second instance in Pakistan when a company has issued notice for sovereign guarantee. Earlier, Hub Power Co did that in 1998 but the government took urgent measures to pay the dues of Hub Power Co within the timeframe avoiding invocation of sovereign guarantee. However, in this case, the notice period of 30 days have already passed and the government doesnt seem to take it seriously as the meeting between Pepco and the 4 IPPs on 13 June 2011 ended inconclusively and more than Rs 10 billion of these IPPs are yet to be paid by them, sources added. If the government fails to pay the dues to these IPPs then the financial stability of the country will become a question mark and it will face dire consequences in the international arena.