Islamabad: Five Independent Power Producers (IPPs) will have their contracts with the Federal Government terminated.
Prime Minister Shehbaz Sharif said during his address to the Federal Cabinet Session that the administration has been working nonstop for the past seven months to find a solution to the IPP-related problems.
He stated that the President of the Pakistan Muslim League (N) has been concentrating on finding a solution. He added that every related ministry has been working nonstop to find a solution to the problem.
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Shehbaz said that an Owais Leghari-led task force related to IPPs had been formed.
He disclosed that they had terminated contracts with five IPPs during the first phase. He highlighted the value of openness, stating that withholding the facts would be unfair.
As to the agreement, IPPs such as Rousch Power, Saba Power, LALPIR, HUBCO, and Atlas Power, whose contracts were terminated, would be entitled to receive their arrears without any markup.
It was informed that the Rousch Power unit will have its ownership transferred to the government for the Privatisation Commission’s subsequent privatization because it was built on the Build, Own, and Operate (BOP) basis. The remaining four IPPs would continue to be owned by their separate owners and the government would not be required to pay any fees following the contract termination.
Thanking those who endured inflation patiently and mentioning that it was time to take action to alleviate their problems, the inflation rate was lowered from 30% to 6.9% in just seven months, well ahead of the target for 2025.
The prime minister highlighted Army Chief General Asim Munir’s efforts in this regard.
Shehbaz Sharif commended the five IPPs for putting the good of the country ahead of their own interests. He said that this move would save the national exchequer 411 billion rupees overall and save 60 billion rupees a year in power costs for customers.
He verified that they wouldn’t be required to continue making these payments.
The Prime Minister went on to say that this move, which would also result in lower electricity prices, has been approved by the owners of these five IPPs.
He said this was just the beginning of a larger reform process that would benefit the entire area and that they would progressively evaluate contracts with other IPPs to cut electricity costs.