ISLAMABAD: The government has deferred the constitution of an inquiry commission and release of the report on the power sector for two months in what appears to be an attempt to convince the Independent Power Producers (IPPs) to settle the issue through negotiations.
According to documents, “In order to provide a chance of meaningful negotiations with the Independent Power Producers (IPPS), constitution of Inquiry Commission under Pakistan Commission of Inquiry Act, 2017 may be deferred for two months. Release of the report would be decided thereafter.”
Sources said that the government backtracked following resistance from a few cabinet members, who reportedly told Prime Minister Imran Khan that the release of the report could damage the reputation of the government.
Special Assistant to Prime Minister (SAPM) on Petroleum Division Nadeem Babar, a shareholder in Orient Power IPP, was also against the constitution of the commission and release of the inquiry report, the sources said.
It is relevant to note here that Federal Planning Minister Asad Umar had announced making public the inquiry report on power sector losses.
Prime Minister Imran Khan had earlier formed a nine-member inquiry committee under a former chairman of the Securities and Exchange Commission of Pakistan (SECP) to unearth losses in the power sector and help mitigate the financial losses being suffered due to high profits of IPPs.
In its recommendations, the committee had suggested that basic tariff of IPPs should be changed in Pakistani currency instead of dollars as this change will enable the country to pay Rs8 billion in the next few years. And if this change is not made, an amount of Rs3,266 billion will have to be paid. Similarly, the profits to the IPPs owners should be given in Pakistani rupees instead of dollars.
The country could save Rs4,700 billion only with change of currency in the agreement, instead of ‘Take or Pay’ contract. The government is suggested to revoke the practice of capacity payment based on ‘Take or Pay’ with the owners of IPPs.