IPP Advisory Council Chairman claimed that electricity produced by IPPs is far cheaper than that produced by state-run generation companies. PHOTO: AFP/FILE
Independent Power Producers (IPP) Advisory Council Chairman Abdullah Yousaf, while talking to The Express Tribune, said the Council is hopeful that the government will honour its commitment this time around and provide relief to IPP investors and the general public at large.
“The new government is more committed to resolve this issue. Once provided this amount, power producers will able to add around 2,000 megawatts to the national grid, which will be provide relief to consumers in the month of Ramazan,” he added.
The release of payments will also help restore the lost value of the sovereign guarantees invoked by a number of IPPs when the previous government defaulted on its dues to the former, an official of the finance ministry said. “Since the sovereign guarantees will be restored, it will attract new investment in the power sector and help reduce energy crisis in the long run,” he added.
The new PML-N government, soon after taking office, had announced that it would tackle the power crisis on a war footing. Later, it announced that it would clear the circular debt within the first 60 days of its government.
“We also presented our suggestions to the energy committee so that the circular debt issue might not rise again,” Yousaf said. “The next step for the government should be to ensure maximum recovery of charges against billing to customers to prevent the energy sector from further financial losses. The non-payment of dues can be contained easily through tightening the recovery system,” he added.
He also said the government should now ensure merit-based fuel supply to cheaper energy producers, claiming that electricity produced by IPPs is far cheaper than that produced by state-run generation companies.
“These two steps will help the government reduce load-shedding hours by 30-35% in the short run,” he claimed. “After that, the government should focus on evolving a comprehensive strategy to overcome the power crisis.”
Published in The Express Tribune, June 25th, 2013.
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The best part is that Pakistan's Government is going ahead in honoring their commitment as per agreements made with IPPs under their Policies at different times.
More important is to make swift recoveries from each and everyone - be it government or private. To be more focused and quick meaningful results, all attention should be paid on top 80% customers (amount wise) in private sector in the first few weeks followed later to recover from bottom 20% customers.
Immediate stop[ supplies of oil and gas to government inefficient units.
Disconnect all kundas with a strong warning to refrain from it in future.
Recalculate tariff excluding all inefficiencies and then charge the users accordingly. What's then left would be reflected in subsidies which would go into the account of the Government's performance. That's fair.