Task force formed to implement structural reforms in power sector

Prime Minister Shehbaz Sharif has announced the formation of a high-level task force to implement structural reforms in the power sector. 

The initiative aims to reduce the financial burden on the federal government and establish an efficient, self-sustaining competitive power market. 

According to a notification, the task force, chaired by Federal Minister for Power Sardar Awais Ahmad Khan Leghari, includes representatives from various regulatory bodies. 

Former caretaker federal energy minister Muhammad Ali, rehired as the premier’s special assistant on power with the status of minister of state, will serve as co-chairman, with Lt Gen Muhammad Zafar Iqbal, HI (M), as national coordinator.

As per a news report, Muhammad Ali, co-chairman of the task force, previously worked with intelligence agencies during the PTI government and produced an investigation report that led to revised agreements with about three dozen old power producers, resulting in significant savings. However, his call for a forensic audit of contracts and renegotiations with subsequent plants under the 2015 policy remained unimplemented. 

As caretaker energy minister, he was instrumental in increasing gas tariffs by over 480% before the February 2024 elections. His expertise is expected to be utilised in dealing with private power producers set up under the 2015 policy, including Chinese independent power producers.

Other members include Syed Zakaria Ali Shah from the Secretariat Group and nominees from Nepra, SECP, Central Power Purchasing Agency, and Private Power and Infrastructure Board. 

The task force will recommend measures to make the power sector financially and operationally sustainable, develop an efficient power market, and utilise excess capacity by industries and special economic zones to stimulate growth.

The task force will also review and recommend measures to reduce capacity payments, address malpractices in the setup of independent power producers (IPPs), ensure compliance with government agreements, and propose solutions to the circular debt issue affecting the energy sector. The task force will oversee the implementation of its recommendations.