Govt Forms Task Force to Identify Fault Lines with IPPs, Avoids Unilateral Action

In a significant move, Power Minister Awais Leghari has established a special task force to thoroughly examine and rectify the contentious issues surrounding Independent Power Producers (IPPs) in Pakistan. The primary objective of this initiative is to identify and address the fault lines in the existing tariff structure and contractual agreements, thereby preventing any unilateral actions that could potentially expose the country to substantial penalties in international arbitration.

The task force, comprising renowned experts including Muhammad Ali, will meticulously explore various options to resolve the discrepancies, including offering net present value of contractual returns for expensive projects, revising agreements from “take or pay” to “take and pay”, and providing fixed Operation and Maintenance (O&M) costs for select projects.

Minister Leghari categorically emphasized that the government has no intention of shutting down any IPPs, as their contracts are safeguarded by legal protections and sovereign guarantees. He reiterated the government’s commitment to finding an amicable solution, avoiding legal battles and penalties, while ensuring a stable power sector.

Meanwhile, Nepra Chairman Waseem Mukhtar reported a continuous decrease in electricity demand, stating that the regulator has no plans to add new capacity to the grid. The Senate committee session also witnessed criticism of Nepra’s independence and tariff adjustments, with senators demanding transparency and detailed reports on power projects nationwide.