KARACHI: The business community on Monday called for review of agreements with independent power producers (IPPs) to save domestic and industrial consumers from inflated power bills.
Addressing a press conference at the Federation House, Acting President of the Federation of Pakistan Chambers of Commerce & Industry (FPCCI) Saquib Fayyaz Magoon said that the federal government should review all agreements with IPPs and procure electricity for the national grid from cheaper and cost-effective sources.
Magoon informed that exorbitant and unbearable electricity tariffs have led to widespread industrial closures and massive job losses. The acting FPCCI chief further said that Rs2 trillion capacity payments to 40 companies are paralyzing the national economy, and IPPs continue to receive payments in the name of capacity charges even in instances when there is no electricity generated or supplied. Capacity charges constitute two-thirds of the total cost of electricity; while fuel costs comprise only one-third.
Magoon maintained that studies reveal that IPPs have been enjoying returns exceeding 73 per cent in dollar terms; which is unusually high and predatory when compared to international standards and practices.
Patron-in-Chief of the United Business Group SM Tanveer called for a forensic audit of IPPs and noted that Rs2,000 billion in capacity charges annually is daylight robbery, depriving consumers of their income.
He said that 25 per cent of industries have closed down and their machinery is being sold at throwaway prices.Vice President of the FPCCI Asif Inam said that electricity should be produced from cheap sources of fuel as export growth is not possible under the current high power tariffs.
