KARACHI Chairman of the FPCCI Advisory Board and National Business Group Pakistan, President of Pakistan Businessmen and Intellectuals Forum Mian Zahid Hussain said that the Government’s silence on the issue of IPPs despite heavy criticism and losses of thousands of billions of rupees is incomprehensible.
He said this problem would not be solved by delaying it or issuing statements; steps must be taken so that low-income people could sigh of relief.
Mian Zahid Hussain said that since the Government itself is charging a high rate of profit on its IPPs, how can it stop the IPPs established by the private sector from doing the same?
He said that the organizations that are losing billions of rupees annually and surviving on loans and bailout packages have also established their IPPs to suck the blood of the masses.
The Government should immediately conduct a forensic audit of all IPPs, make their contracts public and make all payments to them in local currency, he demanded. If the Government immediately privatizes its IPPs, the losses of the energy sector will be reduced, and the cost of generating electricity will come down, he said.
He said people and businesses can get affordable electricity by creating healthy competition in electricity generation and transmission. The Government should decommission obsolete power plants and set subsidized rates for power-consuming industries to minimize the burden of capacity payments by utilizing the surplus power generation.
Additionally, silently renewing contracts with IPPs earning incredible profits should also be stopped, as it is now impossible to keep such matters secret. Moreover, agreements with IPPs should be tabled before the Parliament for debate and approval.
Mian Zahid Hussain said that in 2015, the average electricity consumption was 13,000 megawatts while the total production capacity was 20,000 megawatts, for which a capacity payment of Rs200 billion was made.
The average power demand in 2024 is 20,000 MW. Still, the generation capacity has increased to more than 43,000 MW, including 23,400 MW of new IPPs. Due to the increase in production capacity, the capacity payment has increased 10 times and has reached Rs2800 billion next year.
Mian Zahid Hussain further said that fair competition should be promoted in the electricity sector and that the private sector should be attracted to investing in the transmission network. Negotiating with IPPs will require thorough legal, technical and financial consultation among experts, as hasty action could lead to another disaster like Riko Diq.
Copyright Business Recorder, 2024
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