ISLAMABAD: The recent surge in electricity prices has sparked widespread criticism of Independent Power Producers (IPPs) and the agreements signed with them, ARY News reported.
Legal experts argue that the contracts with IPPs, set to expire in 2050, need to be revisited to address the issue.
Speaking in ARY News program ‘The Reporters’, international expert Hafiz Ahsan Ahmed emphasized the need for the government to review the agreements and ensure that no extensions are granted to IPPs.
He suggested that the government should use existing parameters to renegotiate the contracts, including auditing the companies’ finances and taxes.
Ahsan explained that a “heat audit” could be used to identify discrepancies in the companies’ reported production capacity. He criticized the government for not taking action and instead, allowing IPPs to threaten them with international laws.
The expert emphasized that the agreements contain flaws that can be used to resolve the issue. He urged the government to identify these weaknesses and renegotiate the contracts to find a solution.
Earlier sources revealed that the Government of Pakistan estimated capacity payments to IPPs amounting to Rs 2,091 billion for the current fiscal year.
According to official documents, the highest capacity payments estimated for nuclear plants at Rs 465.7 billion.
The capacity payments for hydropower plants estimated at Rs 446.4 billion, while imported coal power plants are expected to require Rs 395.4 billion.
READ: Pakistan to pay Rs2,091 billion in capacity payments to IPPs in FY2024-25
Prior to this, MQM leader Mustafa Kamal demanded of government to cancel the capacity charges agreement with local IPPs.
“I plead to the prime minister that 70 percent IPPs have been locally owned. Talk to them over the mistaken policy, they have earned thousands of billions and now we could not pay them more,” MQM leader said.
