ISLAMABAD, Aug 8: With the power crisis worsening, new independent power producers (IPPs) — six of them leading business houses — have come up with fresh demands asking the government to increase their tariff and allow market-based indexations to ensure better returns on their investments, it is learnt.

The demand came to surface on Wednesday at a meeting Minister for Water and Power Liaquat Ali Jatoi had convened to review the progress on setting up of new power projects. The electricity shortage this year crossed 2,900MW and is likely to go up further next year.

The government through the National Electric Power Regulatory Authority (Nepra) had earlier offered the IPPs an average upfront tariff of about 12 cents (over Rs8) per unit provided they sign agreements by December 31, 2006, for fast-track addition of new generation capacity by suspending various procedural requirements to meet energy crisis on emergent basis, an official who attended the meeting told Dawn.

Most of the IPPs have failed to finalise their agreements by the deadline and Nepra extended the deadline for another year -- till December 31, 2007. The IPPs have now demanded that their upfront tariff should be increased without withdrawing other incentives allowed under the original scheme.

The official said that a couple of IPPs had also suggested that the government or its agencies should enter into gas supply agreements with them on nine-month basis and in case of any interruption in gas supply during this period, the IPPs should be entitled to payment by Wapda even if there was no power production. The suggestion was not taken very seriously by the government side.

The power minister directed the agencies concerned, including Nepra, to resolve issues with the IPPs within a weak so that ‘fast-track projects’ could be completed as early as possible to meet future power demand. The minister was, however, informed that none of the projects could come into production before the last quarter of the next year.

Mr Jatoi assured the IPPs that the government would provide them all support to materialise their investments. He asked the IPPs to expedite work on the projects and instructed the PPIB, Nepra, Wapda and the ministry of petroleum to facilitate them and resolve their issues.

The minister said that the demand for power is increasing tremendously and all stakeholders should be ready to meet the challenge. The IPPs also assured the meeting that the projects were being developed as per schedule and these would be completed within the prescribed timeframe.

Earlier, the Wapda chairman told the meeting that the power utility had electrified 43,670 villages since 2003-04, compared with only 73,829 villages electrified since the creation of Pakistan. He claimed that distribution losses of Wapda had reduced from 24.4 to 21.5 per cent since 2003-04. He said Wapda had collected Rs274.5 billion revenues in 2006-07 as compared to Rs194 billion in 2002-03.

The minister asked Wapda to resolve the issue of transmission lines for import of power from Iran. He also asked the Wapda chairman to make arrangements for meeting the power shortage in the next summer season.