Reforming IPPs

While the federal government’s cancellation of five Independent Power Producers (IPP) contracts is commendable, much more needs to be done. For two decades, successive governments have failed to regulate the guaranteed capacity payments to over 100 IPPs. This oversight persists despite the lack of an authentic audit verifying each unit's capacity to produce electricity – yet trillions of rupees have been paid to IPP owners.

IPP units failing to meet their contractual obligations should face cancellation of their Power Purchase Agreements (PPAs) for breach of contract. The reluctance of successive governments to enforce accountability raises questions of complicity or conflict of interest. It is imperative to conduct a thorough technical audit of all IPP units with capacity payment agreements, without further delay. The consequences of unchecked energy costs are severe, not only for citizens but also for our export sector, which struggles to remain competitive amid the region’s highest energy prices. If Pakistan aims to boost exports and strengthen revenue, we must bring energy costs down. Doing so would give the government the fiscal space to invest in education, healthcare, and essential services, as well as in research and technology. An educated, self-sufficient population is essential to combat extremism and safeguard national security.

Malik Tariq Ali

Lahore