SC hears case on payments to Independent Power Producers

ISLAMABAD: Federal Minister for Power Omar Ayub Khan informed the Supreme Court on Monday that agreements with independent power producers (IPPs) were made during the tenures of various governments.

A three-judge bench headed by Chief Justice of Pakistan Mian Saqib Nisar was hearing the case pertaining to excessive payments made to independent power producers by the government.

During the hearing, the Justice Nisar inquired about how the agreements were made. “The government have to pay them whether they generate power or not.”

“How much money paid to them so far?” the chief justice asked. “The money is being taken from the poor to pay the rich.”

In response, the energy minister said agreements with these companies were signed during the tenures of various governments.

“The power generation reduces in winter due to lesser demand”, the minister added. “The government has an agreement of electricity units purchase with private power companies.”

In the previous hearing, Justice Ijazul Ahsan, quoted a report stating that IPPs were paid Rs159 million each and questioned if the power producers were paid as per their power generation capacity.

The secretary power division, who was present in the court, explained that the IPPs were paid as per their capacity and fuel consumption. “They are paid as per their capacity regardless of whether they generate electricity or not.”

“Millions of rupees were paid to IPPs even if they produced electricity or not,” Justice Nisar remarked. “Such agreements are being cancelled the world over.”

“People didn’t receive electricity but private companies were made full payments. Nothing was obtained by paying billions of rupees to private companies,” he added. “We are sending this matter to the National Accountability Bureau (NAB).”