Startling revelations have come to fore regarding the heinous role of some of the Independent Powers Producers in Pakistan for receiving billions of rupees from the government without generating electricity due to faulty contracts.

According to sources, compared to Bangladesh and Vietnam, IPPs installed wind plants of same capacity in Pakistan at four times the cost, indicating over-invoicing. Despite having coal reserves in Pakistan, IPPs are relying on imported fuel such as high-speed diesel and imported coal to generate electricity. These actions by IPPs are resulting in the production of expensive electricity.

The sources further revealed that IPPs did not generate as much electricity as the imported fuel they brought in and also received billions in subsidies from the government. IPPs are avoiding forensic audits despite the government’s constant insistence. Besides, IPPs received billions from the Government of Pakistan for plant maintenance. However, only a quarter of that amount is spent on actual
plant maintenance.

The sources said surprisingly, the Government of Pakistan is also bearing the insurance costs for IPPs. Initially, the Government of Pakistan bore the costs of setting up IPPs. The Government also facilitated the IPP owners in terms of tax duty and insurance.

Despite bearing all these costs, the plants will not be owned by the Government of Pakistan after the expiry of the contract period. Most IPP owners are local, but contracts were deliberately made in the names of some foreigners.

According to energy sector experts, due to heavy payments to IPPs, the government is facing severe difficulties in investing in other important sectors. They recommended the government to review the agreements.

Sources disclosed that most IPPs are dominated by a few influential families in Pakistan. However, some IPPs are willing to negotiate with the government and reduce prices voluntarily.

Source: Radio Pakistan