Some Independent Power Producers (IPPs) in Pakistan have received billions of rupees due to wrong contracts, while not even producing electricity.
According to government sources, IPPs charge four times more for wind plants in Pakistan than in Bangladesh and Vietnam. Despite the fact that the country has vast coal reserves, IPPs are dependent on imported fuel for power generation, due to which electricity prices continue to rise.
Electricity is likely to become more expensive for consumers in Karachi
Government sources said that the IPPs did not generate more electricity than the oil they imported, and also received subsidies worth billions of rupees. Despite the insistence of the government, the IPPs are reluctant to undergo forensic audits, while they have received billions of rupees in the name of maintenance of the plants, although not even a quarter of these expenses have been utilised.
Surprisingly, the government is also bearing the insurance costs of IPPs itself. Initially all the costs of setting up IPPs were borne by the government, and they were also provided with tax duty and insurance facilities. However, these plants will not be owned by the government when the contracts expire.
According to government sources, most of the owners of the IPPs are local, but contracts are deliberately awarded in the name of some foreigners. IPPs in Pakistan are also monopolized by a few influential families.
Government’s decision to close 5 IPPs
Government sources further said that some IPPs are willing to negotiate with the government voluntarily so that the prices can be reduced, but overall, due to the collusion of IPPs, the government has lost billions of rupees.
Experts say that IPPs have earned hundreds of times their cost, so the contracts need to be reviewed.
