ISLAMABAD: The government’s investigation team looking into the independent power producers (IPPs) issue summoned owners of 13 companies after it discovered “additional profiteering” by power plants established under the China-Pakistan Economic Corridor (CPEC), sources told Geo News on Sunday.
With Special Assistant to PM (SAPM) on Power Division Muhammad Ali playing a key role in the probe, the IPP owners have been directed to bring financial reports tomorrow, the sources added.
The development comes after the Senate’s Functional Committee on Devolution, last month, directed the related ministry to conduct a forensic audit of the IPPs with chair Dr Zarqa Suharwardy Taimur expressing concerns about the functioning of the IPPs and the lack of transparency in contracts with them.
The IPPs have been in the light for some time now over their alleged involvement in exorbitant electricity bills that have drawn a strong reaction from the inflation-weary masses.
There have been calls to review the government’s existing agreements with the IPP — the most notable one coming from Jamaat-e-Islami (JI) which staged a 14-day sit-in in Rawalpindi and demanded the renegotiation of contracts with the IPPs among other things.
The government has admitted that the country has the highest electricity tariffs in the region with Energy Minister Awais Leghari saying that the nation would receive “good news” regarding the IPPs soon.
However, it is unlikely that there might be any unilateral change in IPPs contracts as Leghari, earlier this week, said that the government could not unilaterally terminate agreements and warned that such a move will lead the country to face a “Reko Diq-like situation”.
Responding to questions at the Senate’s Standing Committee on Power, the minister — who also chairs a task force reviewing the IPP issue — argued against unilaterally ending these power purchase agreements with the IPPs blamed for massive power tariffs, saying that the contracts have a sovereign guarantee cover.
Providing details on the ongoing probe involving the IPP issue, sources said that influential members of the investigation team have visited various plants to collect records and data.
With senior executives set to converge in the federal capital following interrogation in various cities, the government aims to woo IPP owners underscoring the country’s need for their support.
Furthermore, it has been decided to reduce the capacity payment and profit of government-owned power plants.
Also, the government is set to hold high-level talks with Chinese IPPs to seek concessions.
It is to be noted that in July, Islamabad initiated talks on re-profiling its power sector debt to China, alongside talks on structural reforms suggested by the International Monetary Fund (IMF).
Power division refutes summoning IPP owners
The Power Division, however, has refuted the reports regarding the summoning of IPP owners saying that no IPP owner was directed to appear before the investigation committee.
The sources have stressed that no unilateral action was being taken regarding IPPs contracts and that achieving a consensus is not possible without hearing IPPs.
They also added that talks with the IPPs have been going on for days with the Leghari-headed task force at the helm of it.