KARACHI: Chairman of the Pakistan Business Forum (PBF) for Balochistan, Daroo Khan Achakzai and PBF South Punjab Chief, Malik Talat Suhail lauded the Prime Minister Shehbaz Sharif and federal cabinet efforts to terminate five Power Purchase Agreements (PPA’s) termed a first step for an efficient electricity tariff for the public and industry.
As this move will benefit electricity consumers to the tune of Rs60 billion annually, reducing per-unit electricity costs, and saving the national treasury Rs411 billion overall.
Talking to presser on Friday, they said PBF believes the termination of the IPP agreements marks the beginning of broader reforms aimed at providing economic relief to the public while ensuring the sustainability of the energy sector.
Daroo Khan said the recent approval by Federal Cabinet to terminate Power Purchase Agreements with five Independent Power Producers (IPPs) marks a significant step in the country’s efforts to reform its struggling power sector. The decision, stemming from recommendations by the Task Force on Power Sector Reforms, targets HUBCO, Lalpir Power Limited, Saba Power, Rousch Power, and Atlas Power.
They also recalled that on July 2024, PBF President sent a letter addressed to Federal Minister for Power Awais Khan Laghari, to expressed strong dismay over the electricity tariff hike in Pakistan, emphasizing its adverse effects on both industries and the general public.
The PBF were urged the government to re-evaluate its agreements with IPPs, citing substantial disparities in electricity costs compared to neighbouring countries. With the comparison that electricity costs are approximately Rs3.92 per unit in Afghanistan, Rs17.07 per unit in Bangladesh, and Rs6.29 per unit in India, whereas in Pakistan, rates for domestic consumers have surged from Rs5.72 to Rs7.12 per unit, with additional sales taxes amounting to Rs48.84 per unit. After adjustments and taxes, the rate is likely to exceed Rs65 per unit, putting a tremendous burden on ordinary people.” The letter were also highlighted a significant gap between Pakistan’s installed generation capacity (over 40,000MW) and its peak demand and transmission capacity (25,000MW).
In this regard we are thankful to the government that they undertaken the PBF proposal too.
Chairman of the PBF for South Punjab also expressed support for the government’s efforts to reduce markup rates, emphasizing that further reductions are essential to ease the cost of doing business.
Talat Suhail further praised the Special Investment Facilitation Council (SIFC) for its collaboration with the government to revive the economy, particularly welcoming the Saudi business delegation’s visit to Pakistan.
Additionally, he called for the withdrawal of 50% Minimum Demand Charges (MDI) on closed industries and urged the government to prioritize the revival of the cotton sector. This focus on cotton production aims to enhance foreign exchange earnings and mitigate the financial strain caused by cotton imports, which have been depleting the country’s reserves.
Copyright Business Recorder, 2024
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