IPPs negative role damages economy: Govt sources

ISLAMABAD: The government sources have made startling disclosures about the negative role of some of the country’s IPPs that have damaged the national economy.

The government sources have disclosed that some Independent Power Producers (IPPs) received billions of rupees without generating electricity with wrongful contracts. “The Government of Pakistan burdening consequences of the IPPs wrong contracts”.

Sources said that the IPPs, in comparison to Bangladesh and Vietnam, installed the similar capacity wind power plants with four-times expensive price.

“The IPPs also made over-invoicing in these contracts,” official sources said.

Sources said that despite availability of coal deposits the IPPs using imported fuel for power generation. “Due to it, expensive electricity being generated”.

“The IPPs didn’t generate the volume of electricity which should have been produced with the fuel imported,” sources said. “The power producers also got billions of rupees subsidies from government,” sources said.

“The IPPs evading forensic audit despite the government’s insistence for the due diligence practice,” according to sources.

“They have also received billions of rupees for maintenance of plants, while the maintenance not required 1/4th of that amount,” sources further said.

“Surprisingly the government itself bearing charges of the IPPs insurance. The government had initially bore the expenses of the plants installation,” according to sources.

Sources said that the IPP owners were also facilitated in respect of tax, duty and insurance. “These plants will not become the government’s property after end of the contract period despite bearing expenses”.

“Most of the owners are local but deliberately contracts made with some foreigners names,” sources said.

“Massive payments to the IPPs causing difficulties in investment in key sectors, while the IPPs have earned 100-times profit from their investments,” experts said advising reviewing the IPP agreements.

Government sources said that most of the IPPs have monopoly of few influential families of the country. “Some IPPs voluntarily prepared to hold talks with government and slash prices,” sources said.