ISLAMABAD (Dunya News) – The Federal Government has decided to terminate contracts with five Independent Power Producers (IPPs).
Speaking to the Federal Cabinet Session, Prime Minister Shehbaz Sharif stated that the government was working tirelessly to resolve the issues related to IPPs for the last seven months.
He mentioned that President of Pakistan Muslim League (N) has been focused on resolving the matter. He also noted that all relative ministries have worked day and night to bring resolve to the issue.
Shehbaz asserted that a task-force was established regarding the IPPs that was led by the Owais Leghari.
He informed that in the first phase, they have terminated contracts with five IPPs. He emphasised the importance of transparency, saying it would be unjust not to share the facts.
Under the agreement, the IPPs whose contracts had been terminated including Rousch Power, Saba Power, LALPIR, HUBCO and Atlas Power, would be liable to receive their arrears sans mark-up.
It was told that the Rousch Power unit was established under the Build, Own and Operate (BOP) basis, so its ownership would be transferred to the government for its onward privatisation by the Privatisation Commission. The ownership of the rest four IPPs would remain with their respective owners and after the contract termination, the government would not be liable to pay any charges.
Expressing gratitude to the people who faced the inflation with patience, said the time had come to address their woes and mentioned the reduced inflation from 30% to 6.9% – a target achieved within seven months, far before the commitment for 2025.
The prime minister highlighted the personal efforts of Army Chief General Asim Munir in this matter.
Shehbaz Sharif praised the five IPPs for prioritising national interest over personal gain, stating that this decision would save electricity consumers 60 billion rupees annually and would result in a total savings of 411 billion rupees for the national exchequer.
He confirmed that they would no longer have to make these payments.
The Prime Minister added that the owners of these five IPPs have accepted this initiative, which would also lead to a reduction in electricity prices.
He indicated that they would gradually review contracts with other IPPs to lower electricity tariffs, calling this just the first step in a broader reform process that aimed to benefit the entire region.