Senior military leaders have now become involved in efforts to stabilize the power sector’s finances and operations, according to a report published in The News.
On Monday, owners of various independent power producers (IPPs) held discussions with the military’s top brass, presenting ideas to lower electricity tariffs. The goal is to ease the burden on consumers and the industrial sector while boosting economic development.
The private sector IPPs informed the top military leadership about key issues in the power sector. They highlighted that government power plants receive Rs840 billion annually, and CPEC power plants get Rs650 billion as capacity payments based on a dollar value of Rs278.
In contrast, IPPs established under the 1994 and 2002 policies have been receiving only Rs130 billion, with the dollar value capped at Rs148 since 2021.
The military leadership was told that a single Sahiwal coal power plant’s capacity payments were higher than those of all 2002 IPPs combined. Furthermore, payments for government power plants were also five times greater than those for all older IPPs.
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Owners of six to seven IPPs met with military leaders to discuss power sector issues, stating that eliminating payments to 2002 IPPs would only save the government Rs1.39 per unit in pre-tax bills for FY25.
The IPP owners warned that further pressure on private sector IPPs could deter future investment across various sectors. A proposal was discussed to transfer loss-making distribution companies (Discos) to the provinces; if the provinces fail to reduce losses, the losses will be deducted from their NFC award shares.
The IPP owners proposed that future under-construction dams and hydropower projects be established as public limited companies, with shares floated on stock exchanges. They suggested that each project have a board of directors and hold annual general meetings (AGMs) to address corruption and improve efficiency.
