Govt Saves Rs. 1 Trillion By Renegotiating IPP Contracts

The government has achieved Rs. 1 trillion in savings through renegotiated agreements with Independent Power Producers (IPPs), Power Minister Awais Leghari said on Saturday. He credited the savings to the “whole-of-government” approach and thanked the Army Chief General Asim Munir for his support. Leghari revealed that revised contracts with 16 IPPs will be finalized soon, while agreements with five IPPs have been terminated which helped save Rs. 411 billion. Settlements with eight bagasse-based IPPs contributed Rs. 238.224 billion in savings, and ongoing discussions with Chinese IPPs are expected to yield additional benefits. Re-profiling debt for a nuclear power plant has already reduced tariffs by Rs. 1.5 per unit. The minister outlined plans to privatize IESCO, GEPCO, and FESCO by 2025 and announced the formation of three entities under NTDC: the National Grid Company, Energy Infrastructure Development and Management Company, and the Independent System and Market Operator. Small tariff reductions were reported, with electricity prices dropping from Rs. 48.70 per unit in June to Rs. 44.04, and industrial rates falling from Rs. 58.5 to Rs. 47.17 per unit. A Rs. 150 billion elimination of industrial cross-subsidies is expected to boost economic growth, the minister said. He further said solarization of 27,000 agricultural tube wells in Balochistan will be undertaken at Rs. 55 billion. Other initiatives include transitioning to electric vehicle tariffs to reduce redundant assets through open auctions and implementing special tariffs for households and industries under the Bijli Sahulat Package. The minister emphasized addressing circular debt and poor recovery rates which have added Rs. 250 billion in annual losses.