Senate Committee discusses IPP investment, task force negotiations & reforms to reduce power costs for public

ISLAMABAD, Nov 05 (SABAH): Senator Mohsin Aziz chaired the meeting of Senate Standing Committee on Power held on Tuesday at Old PIPS Hall, Parliament Lodges.

The Senate Committee deliberated on Muhammad Ali’s report on IPPs issued in the year 2020. Senator Mohsin Aziz argued as per report, the investment made by IPPs in the installation of power plants was earned back in two to four years. However, in the case of coal power plants, the investment was redeemed in two years. SAPM on Power, Muhammad Ali, stated that in Pakistan, approximately 13 to 17 percent returns were given, which was twice the returns offered in any other country. Mr. Muhammad Ali opined that the government should step back from the power business and focus on developing power markets, as practiced in other countries.

The Chairman of the Committee stated that the dollar-based regime should be changed into rupees to provide immediate relief to the general public. SAPM on Power informed that the task force is negotiating with the IPPs, and recently, five power plants have been terminated by the task force on the recommendation of NTDC, which resulted in benefit the country Rs. 60 billion annually for the country. He highlighted that the task force has negotiated with the IPPs for the payment of the saved amount which should be paid back to the Government of Pakistan.

Discussing the delinking of bagasse from the international coal price for being a local raw material, Muhammad Ali, SAPM on Power, reiterated that in other parts of the world, bagasse is not linked to the international coal price. As a result of negotiations with the IPPs the task force has able to delinked bagasse from the international coal price and converted it into a rupee-based system. The task force has also sent a Summary to the Cabinet for the approval of this change.

Additionally, Muhammad Ali stated that in the next phase, the task force will negotiate about saved amount with the 18 IPPs from 1994 and 2002, as well as the Government Power Plants. The task force’s negotiations will be completed in the next three to six months. Senator Mohsin Aziz appreciated the efforts of the task force and maintained that if the task force succeeded in its negotiations, it would ease the burden on the masses.

Furthermore, the Committee deliberated on the issue raised by Senator Aimal Wali Khan regarding the inclusion of IPP fees in the electricity bills by PESCO in Khyber Pakhtunkhwa, despite not a single unit of electricity being produced by IPPs in the province. Special Secretary Arshad Majeed apprised the Committee that the price of electricity is determined by the Federal Government and that the rate of the tariff is uniform across the country. The Committee was of the view that Provinces should be given the benefit of indigenous resources.

In attendance were Senators Taj Haider, Syed Kazim Ali Shah, Rahat Jamali, Haji Hidayatullah Khan, SAPM on Power Muhammad Ali, Special Secretary for Power Arshad Majeed and other Senior Officials from the concerned departments