ISLAMABAD: Special Assistant to the Prime Minister, Muhammad Ali has warned that forensic audit of resisting Independent Power Producers (IPPs) will be conducted for the money trail, as is being done on case.
Sharing update with a Senate Panel, headed by Senator, Mohsin Aziz, Mr. Ali who is also co-chair of Power Sector Task Force said whichever power plant/ will not agree to the terms and conditions of government for revision in contracts, will have to face forensic audit.
He said, NEPRA has already given advertisement in local and international press for the forensic audit of an IPP (without naming M/s Halmore Power Company Limited), adding that if any wind or solar power project opted for defiance, will also have to face forensic audit for the money trail. However, foreign lenders(DFIs) consent would be sought for the renewable energy (wind and solar) projects. Recently, lenders (DFIs) of eight wind power projects had asked the government to desist from revision of PPAs with wind power plants forcibly.
Muhammad Ali, dispelled the impression of harsh treatment with IPPs, adding that when intended outcome was possible through negotiators, then there was no need of forensic audit of IPPs. However, forensic audit of each power plant will conducted which will not accept the formula prescribed by the government. The government was payment Rs 70 to 80 billion annually to the power plants whose contracts have been terminated. An amount of Rs 30 billion was being paid to Hubco power plant.
He further stated that the government has extracted Rs 35 billion from the IPPs which were stuck for few years due to arbitration. Now negotiations with government owned power plants (federal and government) to reduce their Rate of Returns.
Muhammad Ali further briefed the Committee that the government is also working on elimination of power sector debt through financing from the banks, adding that Rs 1.3 billion loans are being negotiated with the banks at 6 per cent interest. He said Rs 300 billion will be saved through waive of Interest on Late Payment (LPI).
He said, talks with the banks are underway for loans of Rs 1.34 trillion at 6 per cent interest rate to clear power sector circular debt . some adjustment would be made in the books. Currently, circular debt was around Rs 2.4 trillion but its growth has substantially been reduced.
Talking of wheeling charges, he said, the government is trying to reduce wheeling charges from proposed Rs 26/ kWh to Rs 12 kWh so that electricity market is established as early as possible.
Senator, Shibli Faraz who is also Opposition in Senate grilled the government for non-performance on the power sector but offered Opposition’s full support to fix this sector.
Power Minister, Sardar Awais Leghari said that the government has no plan to impose tax to metering. He also stated that reduction in tariff will be announced soon. Ends
