- APTMA appeals to the government to renegotiate agreements with Independent Power Producers (IPPs) to reduce electricity costs and eliminate capacity charges.
- Devastating Impact of High Tariffs on Industrial Growth: High tariffs are causing industrial closures, job losses, and hindering economic growth.
- Financial Burden of Capacity Payments: Capacity payments to IPPs amount to Rs. 2 trillion annually, a significant financial strain on the government and industry.
- Excessive Returns for IPPs: Returns for IPPs are excessively high, up to 73%, and are further exacerbated by currency depreciation.
- Comparative Analysis Reveals Inflated Costs: A comparison with similar projects in other countries reveals inflated costs in Pakistan, suggesting ghost capacity and over-invoicing.
- Misreporting and Overbilling Concerns: IPPs are suspected of misreporting and overbilling, particularly under take-or-pay contracts, with attempts to audit these discrepancies often obstructed.
- Threat of Social Unrest Due to Rising Electricity Rates: The recent surge in electricity rates may trigger civil unrest and discontent within the business community.
- Recommendations for Government Action: APTMA urges the government to:
- Review and renegotiate IPP agreements
- Prevent over-invoicing and ensure transparency
- Ensure affordable electricity prices
- Examine energy infrastructure for fraud
- Address financial burdens imposed by capacity payments and high tariffs
Urgent Call for Renegotiation of IPP Agreements:
