ICCI calls for revisiting agreement with IPPs

Islamabad : Ahsan Zafar Bakhtawari, President, Islamabad Chamber of Commerce and Industry (ICCI) said that the root cause of the surging circular debt and rising power tariffs is the power purchase agreements (PPAs) signed with the IPPs to pay them in US dollar and called upon the government to revisit PPAs with IPPs to pay them in PKR, says a press release.

He said that IPPs are earning huge profits in dollars, but the businesses are badly suffering due to exorbitant power tariffs and rising cost of doing business. He stressed that the government should change the basic tariff of IPPs in PKR instead of US dollars as this change would save billions of rupees of the national exchequer and provide electricity at affordable cost to the businesses making our export competitive in the international market. Similarly, the profits to the IPPs should also be paid in PKR instead of US dollars. He expressed these views during a media talk at ICCI.

Faad Waheed, Senior Vice President ICCI said that around 47 IPPs are working in Pakistan’s power sector and they have already earned huge profits as compared to their capital investment. As per Power Policy 1994, 16 IPPs had invested around Rs.60 billion and earned over Rs.400 billion, which shows their huge profits in Pakistan. He said that PPAs in Pakistan have made energy cost highest in the region and stressed that to save the industry from closure, the government should renegotiate PPAs with IPPs in the best national interest. Khalid Iqbal Malik, Group Leader ICCI said that the government has made massive hikes in the prices of electricity, gas and POL products to meet the IMF conditions, but these anti-business measures have endangered the survival of businesses. He stressed that the government should withdraw the massive hike in power tariffs and prices of POL products to save the businesses from further closure. He said that already the record high inflation has badly squeezed the purchasing power of the consumers causing great slump in the business activities while the unprecedented hike in the energy prices has made our industry uncompetitive in the world market.