Govt warns non-compliant IPPs of forensic audit

The federal government has announced that Independent Power Producers (IPPs) refusing to accept revised contract terms will face forensic audits to trace financial irregularities, Special Assistant to the Prime Minister Muhammad Ali revealed during a Senate Standing Committee meeting on Monday.

The government has replaced the previous "take or pay" model with a "take and pay" structure, fixing rupee-dollar parity at Rs168. It has also recovered Rs35 billion from IPPs and is negotiating with state-owned plants to lower returns. The revised and terminated agreements are expected to generate Rs1.4 trillion in savings.

Power Minister Sardar Awais Leghari assured that no taxes would be imposed on solar panels and announced upcoming tariff reductions. He also confirmed that load shedding would not occur during Sehr and Iftar, even on high-loss feeders.

Meanwhile, discussions on the privatisation of distribution companies (DISCOs) are ongoing, with plans to privatise three and place three others under long-term contracts. The government has also initiated talks to reduce profit margins on 45 renewable energy projects.

Senator Shibli Faraz endorsed power sector reforms but demanded accountability for those responsible for signing controversial IPP contracts. He criticised provinces for neglecting DISCO losses and questioned their representation on DISCO boards.

The committee was also briefed on the restructuring of the National Transmission and Despatch Company (NTDC) and ongoing efforts to cut power sector debt, including securing Rs1.3 billion in loans at 6% interest and waiving Rs300 billion in late payment surcharges.