LAHORE:Patron-in-Chief United Business Group (UBG) and former caretaker Minister for Industries (ICI&SD) and Energy Departments, Punjab SM Tanveer has urged the federal government to cancel all agreements with Independent Power Producers (IPPs) forthwith and start procuring electricity from cheaper sources without any capacity charges.
In a statement on Wednesday, Tanveer expressed concern over the widespread closures in various industrial sectors due to exorbitant electricity tariffs, saying that he was looking at job losses across the country as a direct result. Tanveer highlighted that the pending Rs2 trillion capacity payments to IPPs had paralysed the country’s economic activities, urging the government to take decisive action before the prevailing desperation leads to total economic collapse.
Pakistan’s energy sector has been ensnared in problematic contractual arrangements with IPPs since the Power Policy of 1994. These contracts, initially designed to alleviate the energy crisis by attracting private investment, have instead led to an escalating circular debt, which reached Rs2.64tr in February 2024. Tanveer feared that the recent surge in electricity rates would trigger civil unrest and discontent among the business community if no timely action is taken by the government.