Federal govt, IPPs directed to submit replies on power accords, high tariffs

PESHAWAR: The Peshawar High Court (PHC) on Thursday sought replies from the federal government and the relevant Independent Power Producers in a petition filed by the Sarhad Chamber of Commerce and Industry and the Industrialists Association, Peshawar, against the IPPs.

The federal government, National Electric Power Regulatory Authority (NEPRA), Peshawar Electric Supply Company (Pesco) and IPPs have been made respondents in the instant case.

The petitioners’ counsel Shumail Butt informed the PHC division bench comprising Justice Ijaz Anwar and Justice Farah Jamshed that agreements were signed with IPPs and purchasing electricity was started in 1994.

However, he argued that these agreements lacked proper checks and balances and high electricity prices agreed upon in these contracts. He said the IPPs exaggerated their production and charged the government excessively.

He pleaded that the government had claimed these IPPs would meet the country’s electricity needs but the companies had failed to uphold their contractual obligations. He said that high electricity tariffs had become the biggest issue, affecting household consumers, businesses, and the country’s overall economy.

He said that people were unable to pay their bills due to expensive electricity tariffs.

In his detailed arguments, the lawyer pinpointed loopholes in the contracts with IPPs and the NEPRA attempts to justify the payment mechanism to the companies in an effort to hush up its own mistakes.

He also pleaded that the Senate committee’s report had revealed that several IPPs were not producing as much electricity as they were being paid for. The committee also recommended recovering excessive payments made to IPPs and expressed concern over the appointment of NEPRA’s chairman.

According to the committee’s recommendations, Nishat Power, Nishat Chunian, Attock Gen, Liberty Power, and Atlas Power received an additional Rs39.2 billion in payments. He maintained that the committee also recommended recovering these excess payments and taking action against those who deliberately engaged in irregularities and concealed facts.

He said the report indicated that WAPDA’s records show that 100 IPPs generate 25,000 megawatts of electricity, utilising natural sources as well as petroleum, gas, and coal. He said the report had pinpointed massive irregularities in agreements with IPPs and prayed the court to order a review of these contracts.

He requested that payments should only be made to IPPs that actually produced electricity. The lawyer also asked the court to instruct the government to conduct a forensic audit of IPPs, ensure the implementation of the Senate committee’s recommendations, and refrain from renewing contracts with IPPs.