Govt claims progress in China debt talks

ISLAMABAD:

The government has been able to achieve "positive development" in negotiations with China on debt re-profiling and conversion of power plants into local coal to pave the way for tariff reduction.

Earlier, Prime Minister Shehbaz Sharif wrote a letter to the Chinese government, in which he requested for debt re-profiling and giving the country a breathing space in meeting debt obligations.

"We are separately talking with China for debt re-profiling and switching over power plants to local coal," a source said, adding that there had been positive development in that regard.

Sources revealed that the government was working on a two-pronged strategy. On the one hand, the prime minister has formed a task force, which is holding meetings on a daily basis to develop a strategy for reducing the tariff of independent power producers (IPPs).

On the other hand, the government is locked in talks with the Chinese leadership to ensure debt re-profiling and run power plants on coal.

The task force has got powers to engage international experts and review IPP agreements in an attempt to slash capacity payments. Agreements with the IPPs would be assessed with mutual consultation, sources said.

National Task Force Chairman and Minister for Power Division Sardar Awais Ahmad Khan Leghari is spearheading power sector reforms and making all-out efforts to arrive at an acceptable solution.

Earlier, he told a parliamentary panel that the government was striving to privatise power distribution companies (DISCOs) to bring efficiency in their operations. "DISCOs will be sold in two batches," he declared.

The government plans to privatise efficient DISCOs in first batch and in second phase, concession agreements will be inked with DISCOs like Peshawar Electric Supply Company (Pesco).

The Power Division minister emphasised on Friday that the government was committed to introducing comprehensive reforms in the power sector to enhance its efficiency. He said that the government was making strenuous efforts in that regard.

Talking to media after chairing a meeting of the National Task Force on Implementation of Structural Reforms in the Power Sector, the minister disclosed that the task force had developed a future strategy for the IPPs.

He said the committee had examined the performance of all IPPs and their power generation capacity.

The task force has discussed various issues being faced by the energy sector and its key objective is to reduce prices of electricity to pass on the benefit to consumers.

The minister ruled out any increase in electricity bills for August as the task force dispelled the propaganda about tariff hike.

He decried that false information was being spread about increase in electricity prices and instead claimed that tariff had been reduced by 77 paisa per unit.

"Unfortunately, media has given an impression that power tariff has been increased," he lamented.

The minister elaborated that fuel charges adjustment for the billing month of August was calculated

at Rs2.56 per unit as compared to Rs3.33 for July. This way, consumers of electricity will get a relief of 77 paisa per unit.

He announced that the government was taking all possible measures to address the challenges being confronted by the power sector to provide relief to consumers, adding that people would hear good news in the next few weeks.