Govt to announce power sector reforms within 3 weeks

Minister says government-owned power generation plants would also reduce their rates in line with IPPs agreement

ISLAMABAD:

Federal Minister for Energy Omar Ayub Khan has said that the government would announce power sector reforms within three weeks, which would also include details of the expected reduction in cost of power generation resulting from the agreements with the independent power producers (IPPs).

He further said that the agreements had been signed with all the IPPs, while with the government-owned generation plants would be finalised in the coming weeks.

Addressing a news conference along with Special Assistant to the Prime Minister (SAPM) on Power Shahzad Qasim on Monday, Khan noted that the initiative would lead to reducing cost of power generation, circular debt and improve electricity distribution system in the country.

He said that agreements with the IPPs established under the power policies, 1994, 2002 and 2006 had been signed.

However, the minister refrained from disclosing the details saying that computations and savings would be made available in three weeks.

“In three weeks, power sector reforms will be unveiled,” he said.

He said that according to the reforms being introduced, the government-owned power generation plants would also reduce their rates in line with the IPPs agreement and added that the agreement signed would also promote the industrial sector.

“The government is introducing power sector reforms and the work is in the final stage,” he said.

The government would announce a detailed reform plan in about three weeks for the power sector including the expected reduction in cost of power generation through revised agreements with the power producers, improvement in transmission and distribution system.

The energy minister observed that the past governments had not focused on addressing the issues of the power sector.

Quoting an example, he said that a subsidy of Rs44 billion was being provided to the tube wells in Balochistan annually.

“The total development budget of the province is Rs80 billion. It means the amount, which could have been used for the welfare of the people is going to waste,” he said.

Khan maintained that a comprehensive plan in coordination with the government of Balochistan and other stakeholders for this correction was also being made part of the power sector reform plan.

“Keep this in mind that the power sector reforms and improvement in transmission system and distribution system will ensure competitive tariffs to the industry and agriculture to help them stand on their own feet,” he said and added “the plan would address the flow in circular debt”.

Khan stated the government planned to promote renewable and alternative energy which would enable the country to generate 70% energy through indigenous resources.