KARACHI: Johar Qandhari, President of the Korangi Association of Trade and Industry (KATI), has demanded the cancellation of contracts with Independent Power Producers (IPPs), citing significant economic harm. Qandhari highlighted that the government’s agreements with IPPs, which guarantee payments in dollars, are severely damaging the economy.

“The government is buying electricity from these IPPs in dollars and selling it in rupees,” Qandhari stated, adding with their profits soaring due to the rupee’s devaluation.” He pointed out that last financial year; the government paid 1,800 billion rupees to these IPPs, with over 2,100 billion rupees due this financial year.

Qandhari criticised the contracts, noting that some IPPs have not generated any electricity yet receive billions in payments, which he described as a burden on the public exchequer and an oppression of the poor. He also raised concerns about capacity charges imposed on people for unused electricity, calling such agreements unprecedented worldwide.

He urged the government to cancel all existing contracts with IPPs and negotiate new ones, stipulating payments in local currency based solely on the amount of electricity purchased. Qandhari emphasized that the current terms, leading to electricity rates exceeding 55 rupees per unit, have caused an economic crisis, inflated production costs, and hindered the competitiveness of Pakistani products in the global market.

Qandhari has appealed to the Prime Minister and the Federal Minister of Energy to urgently address this issue to avert further economic instability.

Copyright Business Recorder, 2024