PTI govt promises cheap power by 2023

Shibli blames past rulers’ agreements with IPPs for expensive electricity

ISLAMABAD:

Information Minister Shibli Faraz on Saturday said the government would ensure the supply of affordable electricity by 2023 and accused past rulers of signing agreements with independent power producers (IPPs) at high rates for personal gains.

“The government is taking practical measures to ensure the availability of electricity at affordable tariff rates,” he said at a news conference, accompanied by Special Assistant to the Prime Minister on Power Division Shahzad Qasim.

The information minister was speaking to the media a day after Prime Minister Imran Khan announced that the government had signed a new agreement with the IPPs under which the cost of electricity generation as well as circular debt would be reduced.

“The new agreement with the IPPs is a first major step towards providing cheap electricity to consumers,” Shibli said. “People can no longer afford costly energy.”

Under the new pact, the IPPs have voluntarily agreed to provide concessions under the 1994 and 2002 power policies.

The information minister blamed the “irresponsible attitude” of past governments for power outages and the circular debt in the energy sector.

“The agreements [signed by past government] not only forced consumers to pay more for electricity, but also affected exports because of an increase in the cost of production,” he maintained.

“After coming to power, the PTI government has taken steps to reform the energy sector.”

Shibli elaborated that a committee was formed on the issue of the IPPs. “The committee has presented its report.”

The minister said in the past, power plants were set up without planning and no attention was paid towards distribution and transmission lines.

He pointed out that one of the major flaws in the agreements with the IPPs was indexing the price with US dollar. “This resulted in a tariff increase each time the rupee depreciated against the US dollar.”

“The governments in the past did not pass on the burden of the increase in the cost of electricity to consumers because of political reasons and that caused the massive rise in circular debt.”

The minister said Prime Minister Imran Khan wanted to address the issue of expensive electricity on an urgent basis so a team was formed to negotiate with the IPPs for revisiting the old contracts.

“The issue had to be settled through talks with the IPPs as the government could not change the agreements unilaterally due to the sovereign guarantees involved.”

Under the new agreement signed with the IPPs, payments would only be made for the electricity acquired and consumed instead of the total installed capacity of a particular power plant.

Shibli further said the renewable power sector was totally neglected in the past but the present government was planning to increase its share in the energy mix to 25% by 2030 to ensure cheaper power production.

“The PTI government is taking corrective measures irrespective of their political fallout.”

Speaking on the occasion, SAPM Qasim said the National Electric Power Regulatory Authority would review the performance of the IPPs.

(With input from APP)