No External Pressure on IPPs During Negotiations: Secretary Power  

Power Secretary Fakhar Alam Irfan disclosed before the National Assembly Standing Committee on Power that violations of agreements by Independent Power Producers (IPPs) had been identified.  Briefing the committee, Secretary Power said that there was no external pressure during negotiations with IPPs.  During the committee meeting, Muttahida Qaumi Movement (MQM) leader and Member of the National Assembly (MNA) Mustafa Kamal questioned why consumers had not yet received relief from revised agreements with IPPs.  In response, the power secretary said it had only been two months since the process began, and relief would start materializing soon.  Kamal further asked whether there was any truth to reports of pressure on IPPs. The power secretary reiterated that negotiations had been conducted without any pressure. “We invited all IPPs and informed them to resolve matters through dialogue; otherwise, a forensic audit would be conducted,” he said.  He added that one or two IPPs had suggested resolving disputes through the London Court of International Arbitration, but the government did not agree to arbitration.  Discussing energy initiatives, the power secretary revealed that the government plans to install a 1,000-megawatt battery storage project in the southern region to stabilize the grid by storing wind energy. Talks are underway with the World Bank, Asian Development Bank, and Islamic Development Bank to finance the project, which is estimated to cost $500 million.  In a briefing to committee, secretary power division informed that the ministry is seeking Rs12.93 billion for the Jamshoro coal-powered plant for its remaining work, as it is almost completed. This is imported coal-based plant and its test run is yet to take place.  When asked why local coal is not being used, the secretary said that the expansion of the Thar coal mine is underway, along with the construction of a railway line from thar to Port Qasim. Regarding the cost of power generation from local coal, imported coal, and oil, the secretary stated that electricity produced from oil costs up to Rs. 35 per unit, from imported coal Rs. 16 per unit, and from local coal only Rs. 4 per unit. The government aims to shut down oil-based power plants within the next three to four years.  The secretary also revealed that last year, LESCO reported losses of Rs. 83 billion, while PESCO’s losses stood at Rs. 130 billion. These losses were attributed to non-recovery of bills and electricity theft.  MNA Mustafa Kamal said that unless the monopoly of distribution companies (Discos) is broken, they are divided into smaller companies, and multiple players are introduced, the issue will not be resolved.  In response, the secretary said the government is moving toward a system with multiple buyers and sellers. “We have registered the Independent System and Market Operator (ISMO) company, and a wheeling policy is required for its operation, which is expected by the end of March. Once in place, even electricity from any plant in Malakand can be purchased by anyone in Karachi,” he added.  Official of the Power Division said that for next financial years 2025-26 PSDP projects, out demand is of Rs. 392 billion of which around Rs. 79 billion for new projects. These projects include Ghazi Barotha transmission line, North-South line and Karachi to central Punjab transmission line. Moreover, a battery power storage in south is another project.