Former Minister Begs Govt to Cancel Rs. 2 Trillion Deal With IPPs And Get Cheap Electricity

Former Caretaker Minister for Interior and Commerce Dr. Gohar Ejaz has called on the federal government to cancel all agreements with Independent Power Producers (IPPs) and eliminate Rs. 2 trillion in capacity payments to prevent further economic devastation. The former caretaker minister wrote on X that the government should procure cheap electricity from economic sources. He said the staggering Rs. 2 trillion in capacity payments to 40 IPPs have pushed the country into a dangerous situation and created panic. “I see closure due to Electricity tarriffs and Severe Job losses I wish only one decision from Govt of Cancellation of IPP agreements and buying from cheapest source without Capacity Payment,” he said. “[Rs.] 2 Trillion capacity payment to 40 companies h[a]v[e] brought the country and the Nation to a state of Desperation we must take steps before it leads to destruction,” he added. Despite the former interior minister’s request, calls for ending unjustified austerity have been ignored. The International Monetary Fund (IMF) has asked Pakistan to increase the electricity tariff by Rs. 5 per unit before July 10, 2024, to get a new program. The lender has set electricity and gas price hikes as prior actions for the new program, so an increase in electricity prices is inevitable. Meanwhile, Pakistan has also asked the IMF to allocate more funds for the next program as the government has implemented all the conditions of the lender in the current year’s budget. Recently, the Economic Coordination Committee of the federal cabinet maintained gas prices for residential consumers, while the forum approved an increase in gas tariffs for captive power plants. The National Electric Power Regulatory Authority (NEPRA) last month also imposed fixed charges ranging from Rs. 200 to Rs. 1,000 per month for residential consumers set to take effect on July 1, 2024. The power sector is expected to generate over Rs. 3.763 trillion in revenue from consumers in the current fiscal year due to the new tariff structure. People will suffer more, to say the least.