Energy task force nears deal with IPPs

ISLAMABAD: Pakistan’s task force on energy is close to sealing negotiations with Independent Power Producers (IPPs), a major development in the country’s efforts to resolve its power sector woes. Secretary Power Division Fakhr Alam Irfan informed the National Assembly’s Standing Committee on Power on Thursday that most of the discussions with IPPs have been concluded, with an announcement expected soon.

“We are legally bound and cannot take unilateral action for relief, but significant progress has been made,” Irfan said during the briefing. The ongoing talks include proposals for some IPPs to shut down entirely, while others with a remaining operational life of up to 10 years may see contract extensions aimed at reducing the burden on consumers.

Special Secretary of the Power Division, who is also a task force member, informed the committee, “We cannot disclose the task force outcome so far publicly, but in two weeks, we will hear good news.” This signals potential relief for the country’s beleaguered power sector, long hampered by inefficiencies and high costs.

Irfan informed the committee that in 2025, the government plans to privatise three distribution companies. These include Gepco, Iesco, and Fesco. Three others — Lahore Electric Supply Company (LESCO), Multan Electric Supply Company (Mepco) and Hazara Electric Supply Company (Hazco) — will be privatized in the second phase within one to three years.

Additionally, the government has recommended long-term concessions for Hyderabad Electric Supply Company Limited (HESCO), Peshawar Electric Supply Company (PESCO) and Sukkur Electric Power Company (Sepco). The Tribal Electric Supply Company (Tesco) and Quetta Electric Supply Company (Qesco) will be retained.

The National Assembly’s Standing Committee on Power, led by MNA Muhammad Idrees, called for a special session to discuss the agreements with Independent Power Producers (IPPs) and tariff disparities, noting industrial users pay Rs78 per unit compared to Rs48 for agriculture.

Federal Minister for IT and Telecommunications Aminul Haque raised concerns about K-Electric’s readiness for monsoon challenges over the past five years, questioning the number of properly earthed utility poles. K-Electric’s CEO reported a significant reduction in power tripping this year and asserted that all 230,000 poles have been earthed. He emphasized there have been no electrocution fatalities in the past two years and clarified a recent incident attributed to K-Electric occurred in a third-party compound.

Despite these assurances, Haque expressed dissatisfaction, stating the CEO’s response suggested everything is “perfect in Karachi” and called for a third-party audit of K-Electric’s poles. He also highlighted discrepancies in K-Electric’s loadshedding reports, noting outages last from 4 to 18 hours, often restored 12 to 36 hours after a fault is reported. The committee chairman proposed holding the next meeting in Karachi for a better understanding of the situation.

At the start of the meeting, the committee sought an apology from MNA Iqbal Afridi, who was absent, for his remarks about a female power utility executive’s attire during the previous session. Committee member Syeda Nosheen Iftikhar expressed regret over Afridi’s comments, stating, “I apologise for the remarks, but Afridi should also apologise. Otherwise, he must be refrained from sitting in meetings.” The committee unanimously supported her demand.

Committee member Khursheed Junejo emphasized the importance of Nepra Chairman Waseem Mukhtar attending future discussions on Independent Power Producers (IPPs), asserting, “This is a critical matter concerning IPPs, and the chairman should be here.” Amir Muqam suggested waiting for the task force’s IPP report before holding a detailed briefing.

Tensions escalated during the meeting as committee members Sher Ali Arbab and Junaid Akbar staged a walkout. Arbab claimed credit for a new feeder approved during the previous government, which led to accusations from Pesco and a police FIR request against him. Chairman Muhammad Idrees left the meeting to coax the disgruntled members back, emphasizing the need for respect among colleagues. He directed Pesco to submit a detailed report on the incident within a week.