SC to be moved against IPPs soon on behalf of nation: Gohar

ISLAMABAD: Former caretaker federal minister of commerce, industry and production Dr Gohar Ijaz has said that a case against Independent Power Producers (IPPs) will be filed soon in the Supreme Court.

In a statement on the social media website, he said that he will approach the court against the owners of 40 IPPs on behalf of the nation. “May Allah grant us success in this mission and help us get justice,” he prayed.

Dr Gohar Ijaz said that huge payments of Rs450 billion were made to IPPs during the first 3 months of this financial year from January to March 2024 and Rs150 billion per month was paid to various IPPs from January to March 2024. Half of the IPPs are running at less than 10 percent capacity and four power plants are receiving Rs10 billion a month without generating electricity.

The former caretaker federal minister said that industrialists, businessmen, domestic consumers across the country will not allow their earnings to be paid in the form of capacity payment to 40 families. Money should be given to only these power plants when they generate electricity.

Former federal minister said that the common stakeholders should be represented in the National Electric Power Regulatory Authority (Nepra).

He said that expensive electricity has become unbearable for all Pakistanis. In 2020, former interim energy minister Muhammad Ali wrote a detailed report in which it was stated that hundreds of billions of rupees were being lost due to government incompetence and misrepresentations by IPPs. He asked why that report has not been fully implemented till date and as to why the government did not order forensic audit as was called for in the report.

Under the EPPs agreements, the cost per unit of electricity in Pakistan has reached Rs60 whereas in South Asia, electricity per unit is Rs18. High cost of electricity is driving citizens into poverty and bankrupting all the businesses.

In an interview, Dr. Gohar Ejaz said that electricity is the most important issue for Pakistan’s industries and it is directly affecting the lives of 24 crore people. “Our think tank has started sharing information and data of IPPs with the nation to ensure transparency and accountability.”

Under the IPP agreements, Pakistan is paying billions of rupees to companies that do not generate electricity. This is madness. The government will have to decide whether the survival of 240 million Pakistanis is more important or guaranteed profits for 40 families.

Dr. Gohar Ejaz said that the unit price of IPPs is Rs24 and according to the data, 100 billion units are being made annually and there are 23,400 MWs of IPPs while old plants are also a burden on the nation. He shared the data of only three plants to which Rs37,000 crore were given despite the plants running at 15 percent production capacity.

Referring to the government’s statements, he said that they say whether the plant should run or not but money is to be paid and asked who signed these agreements. Out of these three plants, two belong to the government and one belongs to a private company. They cannot talk about payment for generating electricity from their own plants. If they talk about payment, the government will get angry with them.

Dr. Gohar Ejaz gave the formula to reduce the price of electricity produced by IPPs. The government should conduct a forensic audit of the contracts with IPPs and he will pay the cost.

The former minister said that industrialists came to him this month and said that there was a cross subsidy of Rs240 billion. The industrialists said the government has agreed to end the cross subsidy. He said he had worked in the government and exports increased by $3.5 billion during the period. He said that he had repeatedly said that manufacturing could not happen until the price of electricity is fixed.

He said that payment of Rs1,950 billion has been made and bills of Rs160 billion are lying with Nepra which has calculated Rs2,110 billion, saying that there are power line losses and they will pay for it. The incumbent energy minister says that there is Rs12 and some paisa per unit capacity payment while the country has hydro power and old Gencos besides IPPs.

He said the unit price of IPPs has become Rs24. The chief executive officers appointed by the government will also be angry with the government. It is said that the IPP agreements cannot be revised as 52 percent of the IPPs are owned by the government. Rs22,000 crore out of Rs37,000 crore were given to the government’s own plants.

Dr Gohar Ejaz said that every contract has been fixed at double price by the government. If the government is serious, it should conduct a forensic audit of the contracts and he will pay for the cost.