Minister eyes Rs5 tariff cut from IPP deals

Energy Minister Awais Leghari announced on Friday that the federal government would no longer purchase electricity from Independent Power Producers (IPPs), emphasizing that there are no 'sacred cows' in the power sector.

Speaking at a briefing on the electricity facilitation package at the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) in Islamabad, the minister stated that electricity tariffs would decrease by Rs5 following the revision of agreements with additional IPPs.

"Contracts with five IPPs have been terminated and more will be done soon. Initial work has been completed with 11 more IPPs. An agreement has also been reached with the bagasse-based plants," Leghari said. "After the revised agreements, electricity will be cheaper by up to Rs5," he added.

"We told the IPPs that if we give electricity at such a high price, who will buy it. From now, no such IPPs will be set up in Pakistan. This is a revolution, which does not occur at D-Chowk," he said, referring to the opposition Pakistan Tehreek-e-Insaf (PTI)'s protest in the federal capital earlier this week.

He said that next week he would apprise the federal cabinet of the decision that the government would not buy electricity in the future. He regretted that the country never pursued any strategy for cheap electricity. "There is no sacred cow in the power sector now," he said.

Leghari also elaborated on the winter power package announced by Prime Minister Shehbaz Sharif this month. The package envisaged Rs26 per unit tariff for consumption of more than their routine electricity use. "This is a convenience package and has nothing to do with the weather," the minister said.

While discussing that performance of the distribution companies (DISCOs), the minister apprised the traders and industrialists that in the first four months of the current financial year, their losses had been reduced to Rs11 billion against the targeted losses of Rs350 billion.

"The performance of the DISCOs has improved with the establishment of the board of governors," he said. "Now, we are bringing in the best people in the public and private sectors."

Leghari said that the country's economy was moving because of the business community.