Pakistan intends to terminate agreements with AES

July 14, 1998 The AES Corp. said that on July 11, 1998, two subsidiaries of AES, AES Lal Pir Limited and AES PakGen (Pvt) Company, received Notices of Intent to Terminate certain key project agreements from the Government of Pakistan.
AES Lal Pir is a 351 MW (net) oil-fired thermal power plant located in the Punjab Province of Pakistan. AES Pak Gen is a 344 MW (net) oil-fired thermal power plant located adjacent to AES Lal Pir.
The notices issued to these projects were substantially identical and assert that AES' subsidiaries made inaccurate anti-corruption representations to the Government of Pakistan. AES believes that these notices are similar to notices received by other independent power producers in Pakistan.
AES strongly denies the allegations made in the Notices of Intent to Terminate and intends to vigorously pursue all available legal options to enforce and preserve its contractual rights under the project agreements.
Despite these Notices, both plants continue to operate normally and the customer, the Pakistan Water and Power Development Authority (WAPDA), continues to meet its payment obligations.

AES is a leading global power company that currently owns or has an interest in 88 power facilities totalling over 27,000 MW in the US, Canada, Australia, Argentina, Brazil, Dominican Republic, Pakistan, the Netherlands, Hungary, Kazakhstan, China and the UK.
In addition to having assets in excess of $ 8 bn, the company has more than $ 5 bn of projects in construction or late stages of development.