The government has dissolved IPPs negotiation committee led by SAPM Shahzad Qasim with immediate effect and constituted a new four-member committee, official sources told Business Recorder.

The committee will comprise of Babar Yaqoob (Chairman), Power Division Joint Secretary (Member); (iii) Muhammad Ali former Chairman SECP and author of IPPs inquiry report and; (iv) Babar Qasim Wadood (Member).

Terms of Reference of the committee will be as follows; (i) engage with various IPPs to negotiate on the amounts, rationale and mechanism of excess payment of the past under specific heads as well as due to systemic oversights highlighted in the report, reduction of interest rates and payments on debt and other components, extension of debt tenor, etc, and agreed on changes required to ensure avoidance of these payments in the future. Excess payments are not restricted to the ones highlighted in the report and the negotiation committee may look into the excess payments which may not have been covered in the report; (ii) negotiate on a claw back mechanism for sharing efficiency and other gains and savings in the future between power purchaser and IPPs. These may be subject to verification of various costs, implementation of cost accounting order, heat rate, audit, etc, as the negotiation committee deems fit; (iii) negotiation committee with IPPs change of rate of formula of their profits, return on investment and Internal Rate of Return from USD basis to PKR basis without any USD indexation;(iv) negotiation with IPPs with respect to modalities and mechanisms for shifting from take or pay contract terms to take and pay contract terms; (v) negotiate with IPPs on any other terms, conditions, payments, etc, besides highlighted earlier as the negotiations committee deems appropriate; (vi) coordinate with MoE (PD), Nepra, CPPA-G, NTDC, PPIB, AEDB, etc, for any actions that may be required from these organisations towards achieving the objectives; (vii) documents the understanding reached with IPPs towards achieving the objectives of these ToRs; and (viii) recommend IPPs which should be considered either for retirement or for detailed forensic audit.