The inquiry committee formed to probe the alleged minting of billions of rupees by Independent Power Plants (IPPs) revealed on Friday that the power sector is incurring a loss of Rs1bn per day.The committee pointed out that Pakistanis were being provided electricity at the most expensive rate in the region. It said that private companies provided false oil statistics to secure better tariffs.In accordance with the power policy of 1994, 16 private companies invested Rs50.80bn and to date, have earned a profit of Rs415bn. The committee further said that investors of these private companies paid 22 times the profit to their business partners.
The findings stated that 2,934MW power projects were installed under the 2002 power policy. Private companies involved under this policy invested Rs57.80 and to date, have earned a profit of Rs203bn.Two companies built power projects under the 2015 power policy. One of the companies earned a profit of 71% on its investment in one year. The other company earned a 32% profit on investment in a single year.The power generating companies portrayed they had used more oil to produce electricity when they had, in fact, made use of less oil. As per the inquiry committee's findings, these companies earned an additional Rs64.22bn over the past nine years because of the oil figures they showed. By the same proportion, these companies will earn Rs145.23bn more in the future, said the inquiry committee.
Eight projects were installed under the power policy of 2013. Under the same framework, these companies were paid Rs6.33bn more. Hence, from 2002 to 2020, these companies have been paid Rs565.88bn more.The committee said that the Jamshoro Power Plant and Sahiwal Coal Power Plant cost $660,000 per megawatt and $1,000,000 per megawatt respectively. From 2005 to 2010, the production cost of electricity increased by 148%.The power sector received payments of Rs3,202bn from 2007 to 2019 while the subsidies paid during the same era amounted to Rs2,860bn. Liquidity payments worth Rs142bn were made.In 2019, Rs465bn were added to the circular debt. In 2007, Pakistan's government debt was 52% of its GDP and by 2019, it increased to 85% of the GDP.In its recommendations, the inquiry committee called on the government to recover additional payments made to private power companies. It said that profit to these power companies should be paid in rupees instead of dollars.The committee stated that if the government acted on its recommendations, it can save up to Rs4,700bn in the future. It called on the government to convert existing agreement with power plants into 'take-or-pay' contracts, which can save up to Rs150-Rs200bn.
Source: This news has been taken from www.thenews.com.pk
