KARACHI: President Pakistan Business Forum (PBF) Khawaja Mehboobur Rahman questioned the rationale for paying capacity charges to government power plants and called for a forensic audit of all power facilities.
He pointed out that the government’s debt to local banks has reached Rs50 trillion, with Rs30 trillion deposited in current accounts. Banks pay 10% interest on deposits but charge 22% interest when lending to the government, creating an unsustainable financial burden.
The PBF has urged the federal government to include revising power contracts with IPPs in the draft of 26th constitutional amendment before table to parliament in order to save the country’s sinking industry as the capacity of IPPs Electricity rates are unaffordable due to charges.
President PBF Khawaja Mehboobur Rahman said that compared to the capacity of 45,000 MW, only 22,000 MW of electricity is coming in the main transmission line, but consumers also have to pay for unused electricity. “We have to pay 56% of the cost in capacity charges due to unfair contracts with IPPs.”
“Government should decide whether it wants to save 40 people or 240 million Pakistanis,” he asked. He said the industry was unable to keep factories running at this rate of electricity and shut down had started.
President PBF added that revision of electricity rates is an urgent matter and the government should take immediate steps to resolve the issue, otherwise the industry cannot be revived once shut down.
The business community is committed to helping the country and the government achieve long-term growth and bring in $100 billion by the end of 2030, but it needs to address issues like electricity tariffs to reduce production costs so that our industry can compete. As we, Pakistan Business Forum urged the government to set electricity prices at Rs25 per unit.
Khawaja Mehboob also highlighted that Pakistan’s defence budget stands at Rs2,500 billion, with substantial amounts going towards interest payments. He argued that lower interest rates and cheaper electricity would boost industries and drive national development.
Copyright Business Recorder, 2024