Power Minister Awais Announces Revised IPP Deals for Pakistan's Energy Sector

In recent developments concerning Pakistan's energy sector, Minister for Power, Sardar Awais Leghari, has announced that the public can expect "good news" regarding revised agreements with Independent Power Producers (IPPs) in the coming weeks. This announcement comes as the task force, which includes various government entities, is nearing the conclusion of its negotiations. The power sector in Pakistan has faced numerous challenges, including unsustainable electricity tariffs and issues related to power generation costs.

During a policy statement before the Senate Standing Committee on Power, Minister Leghari emphasized that the revisions to the IPP deals will not be made unilaterally. He stated, "The Task Force, which includes the whole government along with the SECP and other concerned entities, has conducted a comprehensive analysis of power generation units." This analysis includes a review of the Return on Equity (RoE) for government-owned power plants, which is crucial for understanding the financial health of these entities.

Leghari pointed out that the current electricity tariffs are not sustainable, and the government is exploring various options to reduce costs. He mentioned that the task force is scrutinizing the Operation and Maintenance (O&M) costs, investments, and technology used in each power plant. The aim is to identify which plants are essential for the country and which contracts may be terminated to improve the overall efficiency of the power sector.

Furthermore, the Minister highlighted that there is potential for significant savings, stating, "There is a possibility of benefiting by Rs 20 per unit." However, he also noted that the government is looking into how it can benefit from the situation, with estimates ranging from Paisa 50 to Rs 1 per unit. This indicates a proactive approach to addressing the financial challenges faced by the power sector.

In addition to the financial aspects, Minister Leghari addressed customer service issues within the Distribution Companies (Discos). He acknowledged that customer care has been lacking but announced the establishment of customer care centers modeled after the 1122 emergency service. These centers are set to become operational next week, allowing consumers to register complaints through a universal helpline.

Senators raised concerns about the high levels of electricity theft and losses in Discos such as LESCO, SEPCO, and PESCO. Complaints regarding corruption among senior officials were also highlighted, indicating a need for greater accountability within these organizations. The Chairman of the Committee called for clarity in reports, particularly regarding the pricing of Baggasse-based IPPs, which has been a contentious issue.

As the review of the power sector nears completion, it is clear that the government is taking steps to address the pressing issues of electricity supply and pricing. The upcoming announcements regarding the revised IPP deals could potentially lead to a more sustainable energy future for Pakistan. It is essential for the government to maintain transparency and ensure that all stakeholders, including consumers, are kept informed throughout this process. The focus on mutual consent and collaboration with IPPs is a positive step towards achieving a balanced and fair energy sector.