Pakistan on Monday expelled the impression that independent power producers (IPPs) were forced to revise agreements and communicated to international development partners that they had the opportunity to either go away from negotiations or resort to arbitration and forensic audit.

There has been a widespread perception that the IPPs have been forced to revise agreements. The government has taken an initiative to change the agreements in an attempt to cut down capacity payments to the IPPs, causing an increase in electricity stars.

Consumers pay RS2.5 trillion to RS2.8 trillion each year to the IPPs that do not even generate a single unit but receive intense payments due to defective appointments. There are several shortcomings in IPP contracts that the government is trying to fix.

In a meeting with International Development Partners, the federal minister of power Awais Ahmed Khan Leghari informed them that negotiations with the IPPs were free, fair and transparent with the opportunity to go away or resort to arbitration and a forensic audit. Leghari participated in a detailed session with the development partners on reforms of the electricity sector and the way forward.

The development partners were led by world director Najy Bone Hassine and included representatives of the International Monetary Fund, Asian Development Bank, International Finance Corporation, KFW, German Ambassy, ​​Foreign, Commonwealth & Development Office (FCOD), Unations Development Program (UNDP) and Asian Infastructure Investment Bank.

While underlining the importance of efforts to rationalize electricity barriers to the economy, the Minister of Power of the Minister of Power assured that all negotiations with the IPPs were held in a free, fair and transparent manner, according to their agreements.

He assessed them about the reforms made by the power department to bring efficiency and discipline to meet goals, adding that electricity prices were pushed to more competitive and affordable levels for all consumers, especially industry.

The reforms include transition from “take-or-pay” to “take-and-pay” clause, elimination of oven oil-based plants and transformation from imported coal to local coal in power production.

Leghari said that a comprehensive and detailed study of power production was conducted, which revealed “We had not adopted the least cost policy in the past, but now it will be the least cost”. He emphasized that the government took steps to engage all development partners, and in that regard it had adopted an inclusive approach to political formulation and execution.

Due to transparency, the government has been able to cut down about 7,000 megawatts from the indicative generation capacity expansion plan (IGCEP) from the total engaged amount of 17,000 MW, saving a huge amount in terms of expensive power.

The minister also pointed to the removal of transmission restrictions through the construction of Matiari Moro Ryk lines, Ghazi Barotha FSD lines that introduced reactive power compensation units and battery storage systems.

He highlighted the process of dividing the National Transmission and Despatch Company (NTDC) in Energy Infrastructure and Development Company and National Grid Company, supplying electricity to special economic zones (SEZs) by developing a regulatory and contractual framework, service level Agreements with industries that have caught power production, installation of advanced measurement measurement of infrastructure (AMI) and AMI) and AMI) Activation protection systems (APMS) of 100% feed.

With regard to elimination of circular debt, the minister told the audience that the government wanted to create clear visibility and end the task in five to eight years. Eliminating electricity tasks and rationalization of subsidies are other steps against rationalization of the electricity stariff.

The rationalization of net meter is also on the cards, adding a burden of RS150 billion to the rest of consumers.

In addition, the induction of step -by -step demand through marginal prices and long -term packages for long -term planning is the need for the hour as excess power is not used by anyone, which adds capacity fees.

Leghari assessed session participants in the wholesale electricity market and added that the government would not buy additional electricity.