In a current assembly held at the Federation of Pakistan Chamber of Commerce and Industry (FPCCI) Regional Office in Lahore, a coalition of business leaders has rallied against the contemporary strength price lists. This organization has entreated the termination of contracts with Independent Power Producers IPP Contracts, arguing that the existing agreements are unfavorable to the kingdom’s monetary health. They have entrusted former caretaker Federal Minister for Commerce, Gohar Ejaz, with the responsibility to steer the campaign and make pivotal decisions concerning this matter.
Criticism of IPP Agreements
During a press conference, Dr. Gohar Ejaz articulated strong criticism of the IPP contracts. Describing the capacity charges as exorbitant and unjustifiable. He revealed that out of 106 IPPs, 53 are operating at only 10% of their capacity yet receive substantial monthly payments amounting to one billion rupees in capacity charges. Ejaz underscored that such financial obligations are untenable and called for a reassessment of these contracts to ensure that payments are directly proportional to the actual electricity produced.
Proposed Reforms
Dr. Ejaz announced the formation of an Economic Policy Think Tank, to be able to include stakeholders from various sectors. This initiative ambitions to seek opportunity solutions for obtaining less expensive strength. To endorse the illustration of the enterprise community in regulatory bodies like NEPRA (National Electric Power Regulatory Authority). He proposed that capacity charges should be capped at eight rupees per unit. Ensuring that the overall electricity tariff does not exceed 24 rupees per unit. This, he argued, would provide a more equitable pricing structure while still maintaining the financial viability of the power sector.
Endorsements and Support
The press conference saw endorsements from key figures such as Khalid Mahmood Khokhar, Chairman of the Pakistan Kisan Ittehad. Shehzad Azam from the export industry. They supported Ejaz’s call for reform and shared their concerns about the unbearable financial strain of IPP contracts on businesses. SM Tanveer, Patron-in-Chief of the United Business Group (UBG). Offered a practical approach by proposing that his power plants be paid only for the electricity they generate Aligning with the broader demand for fair compensation.
The collective action by the business community highlights a pressing need for regulatory changes to address the current electricity tariffs and IPP agreements. This united front reflects widespread frustration among businesses grappling with rising operational costs due to unsustainable power pricing. The call for reform signals a critical juncture in the ongoing debate over energy policy. Its impact on Pakistan’s economic stability.
