Government Investigation Team Summons IPP Owners

Islamabad, The Gulf Observer: The government’s investigation team, probing issues related to independent power producers (IPPs), has summoned the owners of 13 companies after uncovering “additional profiteering” by power plants established under the China-Pakistan Economic Corridor (CPEC), according to the NHC.

Special Assistant to the Prime Minister (SAPM) on Power Division, Muhammad Ali, has played a pivotal role in the investigation, with the IPP owners being instructed to present their financial reports tomorrow, according to the sources.

This development follows a directive from the Senate’s Functional Committee on Devolution last month, which urged the relevant ministry to conduct a forensic audit of the IPPs. Committee Chair Dr. Zarqa Suharwardy Taimur raised concerns about the transparency and functioning of these power producers.

The IPPs have been under scrutiny for their alleged involvement in driving up electricity bills, which have sparked widespread discontent among the public. Calls for revisiting the government’s agreements with the IPPs have grown louder, most notably from Jamaat-e-Islami (JI), which staged a 14-day sit-in in Rawalpindi, demanding a renegotiation of these contracts.

Acknowledging the high electricity tariffs in Pakistan, Energy Minister Awais Leghari recently hinted at potential relief, stating that the nation could expect “good news” regarding the IPPs soon. However, Leghari cautioned against the possibility of unilaterally altering the IPP contracts, warning that such actions could result in legal complications similar to the Reko Diq case.

In a recent Senate Standing Committee on Power meeting, Leghari, who also leads a task force reviewing the IPP issue, defended the existing power purchase agreements. He emphasized that these contracts are backed by sovereign guarantees, making unilateral termination legally and financially risky.

The investigation team, comprising influential members, has already visited several power plants to gather records and data. With senior IPP executives set to gather in the federal capital following interrogations in various cities, the government seeks to engage the IPP owners in dialogue, highlighting the nation’s need for their continued support.

Additionally, the government has decided to reduce the capacity payments and profits of state-owned power plants and plans to engage in high-level talks with Chinese IPPs to negotiate concessions. This comes as Islamabad began discussions in July on restructuring its power sector debt to China, alongside structural reforms recommended by the International Monetary Fund (IMF).

However, the Power Division has denied reports of summoning IPP owners, stating that no such directive was issued. The Division emphasized that no unilateral action is being taken regarding the IPP contracts and that consensus-building is essential, which requires hearing from the IPPs. Talks with IPP stakeholders have been ongoing, with the Leghari-led task force steering the negotiations.