Senate committee for audit of IPPs

The Senate Standing Committee on Cabinet Secretariat Friday has called for conducting a forensic audit of independent power producers (IPPs) after public outcry over inflated bills.

Pakistanis have been receiving high electricity bills which also include capacity payments being made to the IPPs. The power producers are paid capacity payment regardless of whether they generate electricity or not.

Several protests have been staged across the country against high electricity bills, including a sit-in being held by the Jamaat-e-Islami in Rawalpindi.

During the committee meeting, chaired by Senator Rana Mahmood ul Hassan, National Electric Power Regulatory Authority (Nepra) Chairman Waseem Mukhtar briefed the members.

The Nepra chairman informed the committee that maintaining a balance between the government, power companies, and consumers is the most difficult task.

"New electricity generation plants will be installed. By October or November, we will open the commercial market and the consumer will be allowed to get electricity from the company of their choice."

The Nepra chief said that we have all "made mistakes", adding that there was a power crisis in 2007. In 2013-14, power plants were installed with the help of China.

"We thought the GDP would grow at 6%; in line with this, we added [electricity] to the [national] grid. We went into overcapacity due to our sentiments. Our demand has come down."

He said that due to the power shortage, the government had given incentives to the companies. "...we had given incentives in dollars to the companies setting up the plants, the value of our rupee is not stable, so the investor asked for payment in dollars."

Mukhtar said that the price of electricity would not increase if the government gave confidence to the investors and kept the economic conditions stable.

Senator Abdul Qadir said that IPPs made money by over-pricing. The IPPs have made a lot of money in 10 years. Forensic audit should be conducted and it should also be closely monitored.

The committee's chairman Hasan agreed and said that the forensic audit should be done and noted that there's an outcry over the issue.