KARACHI: The FPCCI Standing Committee on Energy has demanded that the government renegotiate IPPs agreements to save the sinking industry.
Malik Khuda Bakhsh, Convenor of the Central Standing Committee on Energy of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), has appealed to the federal government to immediately renegotiate power agreements with Independent Power Producers (IPPs) to rescue the country’s struggling industry.
Malik Khuda Bakhsh, while supporting the demand to review IPPs agreements from the patron-in-chief of the United Business Group (UBG), SM Tanveer, and the leadership of FPCCI, stated that the current electricity tariff, impacted by capacity charges from IPPs, has become unbearable and is stifling industrial growth, endangering Pakistan’s economy.
“Energy prices are the biggest problem in Pakistan, directly hurting industrial growth,” Malik Khuda Bakhsh said.
“We have made it clear to the government that the industry cannot survive until energy prices are reduced.”
He emphasized that all consumers — commercial, industrial, and domestic - are suffering due to high electricity charges in Pakistan. Shockingly, the government is paying Rs2000 billion in capacity charges without actual power generation.
Due to the capacity charges from IPPs, electricity prices have become unbearable. Payments for plants that are not operational or not utilized are driving up electricity costs. Decisions must be made regarding non-operational plants.
He further stated that all IPPs agreements are detrimental to industry and commercial activities. Industrialists across the country are severely troubled by high electricity prices.
Expensive electricity and gas are causing industries to shut down nationwide. Currently, electricity in Pakistan is priced at 17 cents, while in regional countries it is less than 8 cents per unit.
Due to high electricity costs, no new factories are being established. The industry contributes 60% to tax collection; therefore, it is urgently necessary to review the harmful IPPs, and the government should immediately audit the IPPs.
Copyright Business Recorder, 2024