Govt close to finalising power sector deals with independent producers

The government’s energy task force is close to finalizing its negotiations with Independent Power Producers (IPPs), marking a positive step toward addressing the nation’s persistent power sector issues. 

According to a media report, Secretary Power Division Fakhr Alam Irfan in his response to the National Assembly’s Standing Committee on Power, revealed that most discussions with the IPPs are nearly complete, with an official announcement anticipated shortly.

A special session has been called by the committee, chaired by MNA Muhammad Idrees, to delve into the details of the agreements with IPPs and the existing tariff disparities, where industrial users currently pay Rs78 per unit compared to Rs48 for agricultural use.

The ongoing negotiations involve proposals for some IPPs to cease operations, while others with up to 10 years of operational life remaining could receive contract extensions to help reduce consumer costs.

Looking ahead, the Secretary Power Division outlined plans for the privatization of three distribution companies—Gepco, Iesco, and Fesco—in 2025, with three more companies slated for privatization in the subsequent phase. 

Additionally, long-term concessions are being considered for several other electric supply companies, while a few will remain under government retention.

The session also addressed concerns over K-Electric’s preparedness for monsoon challenges, prompted by Federal Minister for IT and Telecommunications Aminul Haque. Despite K-Electric’s CEO reporting significant improvements and no recent electrocution fatalities, Haque expressed dissatisfaction and called for a third-party audit to verify the company’s claims about its infrastructure and load-shedding reports.

Amid discussions, the committee also addressed a previous incident involving MNA Iqbal Afridi, who was criticized for inappropriate remarks about a female executive’s attire during a prior session. The committee unanimously supported a call for Afridi to apologize, emphasizing the importance of maintaining decorum.

The meeting highlighted the critical nature of the negotiations with IPPs, with suggestions to wait for the task force’s final report before proceeding with more detailed briefings. Tensions flared briefly as members Sher Ali Arbab and Junaid Akbar staged a walkout over a dispute regarding credit for a new feeder, leading to an FIR request against Arbab by Pesco.

As the energy sector negotiations near conclusion, the task force is poised to bring about significant changes aimed at improving the efficiency and cost-effectiveness of Pakistan’s power infrastructure, reflecting a comprehensive effort to stabilize the national energy landscape.