IPPs objection on Audit report voids by Annexure B of the document
IPPs raised objection on the audit report that they were not consulted, but there objection is voided by the Annexure B of the report.
According to the details, IPPs are saying they were not consulted while report was being prepared. That is not true.
In the audit report, look at Annexure B, page 259 of the report, it says that the Committee met Khalid Mansoor who is heading the IPP Association.
Additionally, the Committee was not required to meet any IPP but they still met him as the head of the Association.
Committee’s job was to compile report and give it to the Government which they have done. Now Government will sit with IPPs and negotiate how to move ahead.
For this purpose, Cabinet Committee on Energy has already formed a Negotiation Committee.
Why committee didn’t coordinate all IPPs
Let us see if the Committee had written letters to IPPs, what would have happened? IPPs always say they have not done anything wrong, all profits belong to them and if Government decides to take any action, IPPs threaten them with taking them to arbitration in London.
It is good that the Committee did not write to them. When NEPRA wrote to them in 2019 for information on extra profits, they got a stay from the Court and NEPRA, the regulatory body is not even allowed to get information from them.
How do we know IPPs would not have done the same with the Committee’s work? Then no detailed report could have been prepared and IPPs would have continued to make massive profits at the cost of Pakistani public.
Key Points of the report
The report candidly suggests that if the government wants to produce electricity at reduced cost, the only option is to go for re-agreement with the Independent Power Producers or IPPs. If an IPP refuses to accept the agreement, the government must immediately order its forensic audit.
The government must take a strict route to stop the IPPs from blackmailing the authorities, the report says.
The new agreements with the IPPs should be on simple terms of exchange of service for payments. If the IPPs still try to weigh down on the government, the government may retire 11 IPPs permitted through 1994 and 2002 power sector policy through which the government may save up to Rs740 billion.