The panel noted that IPPs receive hundreds of billions of rupees annually from customers.
ISLAMABAD Concerns about expensive power resulting from “faulty and overpriced” contracts with Independent Power Producers (IPPs) might lead to potential instability in Pakistan, a parliamentary panel seeking a thorough assessment of these private producers said.
The panel brought to light that IPPs receive hundreds of billions of rupees annually from consumers, whether or not they produce electricity. The urgency with which lawmakers must handle the public's financial burden and guarantee openness in the energy industry was underscored.
The National Electric Power Regulatory Authority (Nepra) and the Oil and Gas Regulatory Authority (Ogra), two of the energy sector's power regulators, briefed the Senate Standing Committee on Cabinet Secretariat, which convened here under the direction of Senator Rana Mehmood-ul Hassan.
A parliamentary committee member stated, "The current contracts with IPPs are draining the economy and causing undue hardship for citizens." "To find irregularities and hold those accountable for these inflated agreements accountable, a thorough forensic audit is necessary."
Inefficiencies and poor management have long dogged Pakistan's energy sector, and IPP agreements are frequently criticized for favoring private producers excessively at the expense of the general public.
Senator Abdul Qadir emphasized that forensic audits need to be continuously monitored to prevent manipulation by the so-called "IPP mafia." He issued a warning that this influential group would thwart attempts for openness. "This mafia is so powerful that it can bulldoze everyone," cautioned Qadir. He suggested that Nepra bring independent energy specialists to a special briefing on the electricity industry. The chairman of Nepra proposed that since some IPPs have foreign investment, the Power Division, the Ministry of Finance, and the Ministry of Foreign Affairs should also be invited as other stakeholders.
To get more information on the history of IPP agreements, the committee questioned the chairman of Nepra. Members questioned where errors occurred that resulted in improper and costly agreements with private generators, placing the country in this quagmire.
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