Govt in talks with IMF to reduce power tariff

Capacity payments exceeding Rs2 trillion annually

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ISLAMABAD:

Power Division Minister Awais Leghari said on Thursday that the government's savings after negotiations on the agreements with the Independent Power Producers (IPPs) topped Rs1.1 trillion, as he reiterating his resolve to take every possible measure to facilitate the public.

Addressing the concluding session of 4th International Hydropower Conference, the minister said that people could no longer afford to pay the exorbitant electricity bills; therefore, the government was going to revamp the entire power sector.

The International Hydropower Conference was jointly organised by the Energy Updates in collaboration with the Private Power Infrastructure Board (PPIB), Wapda and other stakeholders.

Leghari said that the government was reviewing various taxes included in the electricity bills to provide maximum relief to the consumers. Terming uniform tariff for the entire country as major challenge, he said transfer the burden of one company to another was unfair.

Talks with IMF

Talking to media representatives at the Parliament House, Leghari said that the impact of negotiations with IPPs had reached the common man, and now the government was talking to the IMF to convince it that electricity tariff could be lowered by Rs10 to 12 per unit.

"All agreements with the IPPs will be reviewed, after the review, the people will save a lot. The agreements with 15 more IPPs are being taken to the cabinet," he said, after attending the meeting of the National Assembly Standing Committee on Power.

The minister told the committee that 75% of the total cost of electricity came in the form of capacity charges. He also apprised the committee of the efforts to eliminate the "kunda culture" - the term used for the theft of electricity.

NA Panel

The National Assembly Standing Committee on Energy was told on Thursday that the purpose of imposing fixed charges on consumers is to cover capacity payments, which currently exceed Rs2 trillion annually.

Appearing before the panel, Federal Minister for Energy Owais Leghari stated that residential consumers have already received a relief of Rs4 in the electricity tariff. He said agreements with five independent power producers (IPPs) have been terminated while discussions with sixteen IPPs are ongoing. The minister said the cabinet has approved the revised tariff for eight bagasse plants.

The meeting, chaired by MNA Muhammad Idris, included a briefing by National Electric Power Regulatory Authority (NEPRA) officials who stated that 75% of the total cost of electricity comprises capacity charges.

Malik Anwar Taj, a committee member, suggested that if such high capacity payments are made, the government should provide free electricity to the public. He also criticized ongoing load-shedding and delays in development projects in his constituency.

Minister Leghari highlighted ongoing efforts in Khyber-Pakhtunkhwa (K-P), including agreements to provide uninterrupted electricity to high-theft feeders, which resulted in Rs6 billion in additional losses due to non-cooperation in removing illegal connections.