Senate Standing Committee Requests Forensic Audit of IPP’s Amid Public Outcry Over Inflated Billing

Islamabad, The Gulf Observer: According to NHC, Senate Standing Committee on Cabinet Secretariat has called for a forensic audit of independent power producers (IPPs) following widespread public concern over inflated electricity bills. This action comes in response to numerous protests across Pakistan, including a sit-in by Jamaat-e-Islami in Rawalpindi, against high electricity costs that include capacity payments to IPPs.

Pakistanis have been facing exorbitant electricity bills, which have been exacerbated by capacity payments to power producers. These payments are made irrespective of whether the IPPs generate electricity, causing significant financial strain on consumers.

During the committee meeting on Friday, chaired by Senator Rana Mahmood ul Hassan, National Electric Power Regulatory Authority (Nepra) Chairman Waseem Mukhtar briefed the members on the current power sector challenges. Mukhtar highlighted the complexity of balancing the interests of the government, power companies, and consumers.

“New electricity generation plants will be installed. By October or November, we will open the commercial market and the consumer will be allowed to get electricity from the company of their choice,” Mukhtar informed the committee.

Reflecting on the power crisis of 2007 and the subsequent installation of power plants in 2013-14 with China’s assistance, Mukhtar acknowledged that the decisions were based on an optimistic GDP growth forecast of 6%. This led to overcapacity in the national grid as actual demand fell short of expectations.

“The government provided incentives to the companies in dollars due to the unstable value of our rupee. This has contributed to the high electricity prices,” Mukhtar explained, suggesting that price stability could be achieved through investor confidence and stable economic conditions.

Senator Abdul Qadir raised concerns about the financial gains made by IPPs through overpricing, advocating for a forensic audit and closer monitoring of these entities. The committee’s chairman, Hasan, concurred, emphasizing the necessity of a forensic audit given the public’s outrage over the issue.

The forensic audit aims to scrutinize the financial practices of IPPs and ensure accountability, addressing the public’s grievances and working towards a more equitable energy sector in Pakistan.