Is PTI giving an NRO to IPPs?


The ruling Pakistan Tehreek-e-Insaf appears to be giving an NRO to the Independent Power Producers (IPPs) as the Centre seems to be ignoring the excess payments made to them, industry players and analysts said.

According to reports, changes are being made in the Memorandum of Understanding (MoU) reportedly to favour the IPPs.

The move comes at a time when Prime Minister Imran Khan has denied giving an NRO to the opposition leaders, which has resulted in the formation of the Pakistan Democratic Movement – an alliance of 11 opposition parties formed to oust the incumbent government.

The National Reconciliation Ordinance, or NRO, was a controversial law introduced by then military ruler Pervez Musharraf to drop cases against dozens of politicians in 2007.

The inquiry report on the power sector has recommended recovery of all excess payments amounting to over Rs1,000 billion. However, the government signed an MoU with the IPPs that offers payment of Rs450 billion to 47 IPPs.

Experts and officials say it amounts to giving an NRO to the IPPs.

Meanwhile, key office-bearers in the government, who also own IPPs, started beating the drum of reducing electricity rates.

However, the proposed new agreement does not capture actual frauds committed by the IPPs and recovery of illegal gains made by them.

The government is bending backwards to arrange Rs450 billion funds to make payments to the IPPs for old outstanding dues, whereas recovery of excess payments of more than Rs100 billion relating to 1994 power policy plants, Rs40 billion due to excess payments of fuel price indexation for fuel not consumed, Rs50 billion excess profits etc identified by the head of government committee on power sector audit, Muhammad Ali, in his report, is being ignored. 

The issues identified in the report are missing from the MoU and certain clauses are being diluted to favour the IPPs.

There are some issues, which the decision makers need to take action before finalising new agreements with the IPPs.

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