Govt in bid to save captive plants

Minister tells NA IMF closure condition stands

ISLAMABAD:

The National Assembly was informed on Friday that the IMF condition to shut down expensive captive power plants still stood, but the government was trying to persuade the lender to drop it.

The house met here with Deputy Speaker Ghulam Mustafa Shah in the chair. During the session Minister of State for Petroleum Musadik Malik was present in the house to answer questions from the lawmakers pertaining to the energy sector.

Replying to a query from Syed Naveed Qamar of the Pakistan Peoples Party (PPP), Malik said that the previous caretaker government had entered into an agreement with the IMF to close the captive power plants, adding: "We have approached the IMF against this condition."

Qamar had submitted a calling-attention notice highlighting concerns about reduced domestic gas production, expensive liquefied natural gas (LNG), and insufficient supplies for gas-based captive power plants. In response, Malik assured the house that LNG was available but acknowledged its high cost.

"LNG is expensive. We sought a cargo from Qatar for January, but it wasn't obtained. A tender has now been issued to address the January gas shortage," Malik said. He also noted that five LNG cargoes had been postponed until next year due to excess supply.

"The IMF struck an agreement with the caretaker government in January to close captive power plants. We have taken up the issue of the losses from shutting LNG power plants with the IMF, but the IMF condition of closing the expensive plants remains," Malik said.

However, Qamar raised the point that his question had not been answered, saying that he wanted to know why the government was importing the LNG when the country already had its own 400 MMBTU [million British thermal units] gas.

"The question I had asked is not answered. If we have our own gas, then why are we importing it? The agreement that the officials made with the IMF is against the country's interest, the officials have tied Pakistan's hands," Qamar told the house.

On that the chair told Malik to answer why the government was importing the gas. The minister of state stressed the need for providing gas at a uniform tariff. "If you take gas for Rs3,600 and give it cheaply, you will lose Rs2,500 per MMBTU, which will increase the circular debt," he said.

Agha Rafiullah, who also belongs to the PPP, raised the question about an agreement with Iran for gas. However, the minister declined to provide the answer, asking the lawmaker to send the question in writing and then a written reply would be provided.