Cabinet approves 14 revised IPP agreements, expected to lower electricity prices by Rs11

As a result of these revised agreements, a reduction of Rs802b in profits and costs for these IPPs was agreed upon.

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The federal cabinet, under the chairmanship of Prime Minister Shehbaz Sharif, has approved revised agreements with 14 Independent Power Producers (IPPs), which could lead to a reduction in electricity prices by up to Rs11.

According to Express News, the cabinet meeting approved the proposal to review the contracts with the 14 IPPs based on the recommendation of the Power Division. As a result of these revised agreements, a reduction of Rs802 billion in profits and costs for these IPPs was agreed upon.

The statement issued indicates that an additional Rs35 billion will be deducted from the extra profits of these IPPs accrued over the past years. Ten of these IPPs are operating under the 2002 power policy, while four are part of the 1994 power policy.

Furthermore, one of the IPPs under the 1994 policy had its contract cancelled. The revised agreements with these IPPs are expected to result in total savings of Rs1.4 trillion over the applicable term of the contracts, with an annual saving of Rs137 billion, benefiting consumers.

PM Shehbaz hailed the revised agreements as a significant success, stating that they would not only save the national treasury but also help eliminate circular debt and reduce electricity prices.

The cabinet also approved the merger of the Ministry of Narcotics Control with the Ministry of Interior, as part of the government’s right-sizing initiative.

The Anti-Narcotics Division will now operate as a wing within the Ministry of Interior, while the Anti-Narcotics Force (ANF) will be an attached department of the Ministry.

This merger is expected to save the national exchequer Rs183.25 million annually in administrative matters, salaries, office maintenance, and other operational costs.

Additionally, the cabinet approved the merger of the Aviation Division with the Defense Division. This decision follows the principle of fiscal austerity, as Civil Aviation Affairs were previously managed under the Ministry of Defense until 2013.

The merger aims to improve airspace management and is projected to save Rs145 million annually in similar operational expenses.

Other Cabinet Approvals

Public Procurement Rules: The cabinet, based on a recommendation from the Cabinet Division, approved the addition of Section 45-A to the Public Procurement Rules, 2004. This section allows a procuring agency to delegate all or part of its procurement process to another agency.

National Commission for Minorities: The cabinet also approved the National Commission for Minorities Act 2024, to be sent to Parliament for consideration, as per the recommendation of the Ministry of Human Rights.

Extension of Service: The cabinet granted an extension of two years to Dr Muhammad Bashir’s contract as Member of the Technical Environment Tribunal, Islamabad, on the recommendation of the Ministry of Law and Justice.