To be conducted by PPIB, CPPA-G and Nepra: Govt orders ‘audit’ of agreements with IPPs

ISLAMABAD: Minister for Power Sardar Awais Khan Leghari on Friday ordered the audit of dozens of IPPs (Independent Power Producers) agreements established during the last 30 years, jointly to be conducted by the PPIB, the CPPA-G and the Nepra, after a Senate panel chief termed the contracts of IPPs as “dacoity” and sought project-wise detail including heat rates and regional comparison of price of same technology.

This is the crux of the meeting of the Senate Standing Committee on Power presided over by Senator Mohsin Aziz.

“I have come in the meeting with the predetermined mind that it is a dacoity with the country. We want to investigate this matter in depth in a way that a clear picture is brought before people. We are ready to share our expertise to probe. Guidance can also be sought from reports of Senator Shibli Faraz and Muhammad Ali, former caretaker Power Minister,” said Senator Mohsin Aziz.

PD says ready to annul IPPs pacts if NA panel instructs

After hearing the arguments of the chairman Standing Committee, the Minister for Power stated that there are Power Purchase Agreements (PPAs) Implementation Agreements (IAs) and sovereign guarantees. He instructed officials of his ministry including Managing Director PPIB Shah Jahan Mirza and Chief Executive Officer (CEO) CPPA-G Rihan Akhtar that these agreements involve financial implications and need a thorough probe.

“I would appreciate that If the information and analysis of this matter were dealt with investigated mind and bring out whatever you find from the documents. There are two ways to assist the Parliament in this regard. The PPIB and the CPPA-G people know the agreements inside out and if there is anything which has had any financial implications. Investigate when changes were made to the agreements and what was the financial implication of that change,” the minister said in his directions to top bosses of the PPIB and the CPPA-G.

The minister further directed his ministry and concerned attached organisations prepare an analysis of the IPPs pacts in the light of questions asked by the chairman Standing Committee in simple English or Urdu for members of the committee.

Leghari further directed that if the rate of return of the IPPs, whether listed or not listed on the stock exchange are showing otherwise than what was allowed in the agreements, also be brought before the Committee.

He also asked the top brass of PPIB and CPPA-G to share the efficiency comparison of IPPs along with the extract of the summary of Muhammad Ali’s report.

The managing director PPIB informed the committee that the PPAs with pre-1994 Policy, IPPs like Hubco were based on up-front tariff of 6.25 cents per unit which was later on revised down but no record of those deals is available with the PPIB.

Senator Taj Haider claimed that the PPP government had allowed tariff of six cents per unit, which had to be brought down to four cents and then two cents and after 30 years’ projects were handed over to the government. However, former chairman Ehtesab Bureau Senator Saifur Rehman reviewed the IPPs’ tariffs at 5.25 cents for the entire life of the project on the plea that there was corruption in the pacts.

The chairman Standing Committee sought information from the Power Division that what was the cost, Pakistan paid to General Electric for the turbines and at what price the same technology was bought by other countries.

Copyright Business Recorder, 2024