ISLAMABAD: A high-level business delegation will meet President Asif Ali Zardari on Thursday to discuss business concerns regarding the excessive capacity charges levied by independent power producers (IPPs) and their far-reaching effects on the public and economy. This comes as the citizens struggle with exorbitant electricity bills.
The president will get a briefing on IPP capacity costs from the delegation of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), led by Gohar Ejaz, Chairman of Economic Policy and Business Development Think Tank. Forty-five presidents representing various chambers of business and industries will accompany him.
The agreements with IPPs are already being challenged in court by the FPCCI.
A thorough report on the IPPs would be given to the president, according to Gohar Ejaz.
The research states that Pakistan has a 43,500MW power generation capacity, of which 52% are owned by the government, 28% are owned by the private sector, and 20% are owned by foreign investors.
Because all IPPs function on a “take & pay” basis, they will always get full capacity payments, regardless of whether or not they generate any electricity. The research states that commercial plants operate at 36 percent capacity and charge Rs1.15 trillion year as capacity payment, while government plants operate at 33 percent capacity and charge Rs950 billion annually.
According to the report, the cost of power for all consumers—domestic, commercial, industrial, and agricultural—ranges from Rs60 to Rs80 per unit, which is incredibly expensive.
Instead of paying the Rs24 per unit installed capacity, they are asking for capacity payments based on the actual electricity produced, at a rate of Rs8 per unit.
