• Proposal to withdraw free petrol for all institutions in second phase under review
• Defence minister claims parliamentarians do not get free electricity

LAHORE: The Ministry of Energy has devised a plan to end free electricity benefits for bureaucrats, judges, parliamentarians and other officials amid mounting criticism over the substantial capacity charges paid to independent power producers (IPPs).

According to a Geo TV report, the proposal suggests cutting off free electricity for all government and semi-government institutions, including bureaucrats, judges and parliamentarians.

However, in a post on X (formerly Twitter), Defence Minister Khawaja Asif rejected the impression that parliamentarians receive free electricity.

“The parliamentarians do not get free electricity facilities. I can show my electricity bills of 35 years paid from my personal pocket,” he said.

Mr Asif suggested that judges and bureaucrats should be asked about their electricity benefits.

The news channel’s report also indicated a proposal to eliminate free petrol facilities for all institutions in the second phase.

The ministry’s proposal comes as the country is going through a severe financial crisis, exacerbated by significant foreign debt. Experts say that the government must take extraordinary measures to avoid default and boost exports to $60 billion.

It was reported that according to the ministry’s proposal, legitimate facilities will be provided only to industries and businesses, while a proposal to reduce Maximum Demand Indicator (MDI) charges for factories was also under consideration.

The power division meeting also proposed reviewing the performance of the National Electric Power Regulatory Authority (Nepra) and the Oil and Gas Regulatory Authority (Ogra).

On Friday, the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) announced plans to petition the Supreme Court against IPP owners, seeking an audit of their projects.

At a press conference at the Karachi Press Club, Awaam Pakistan Party leader and former finance minister Miftah Ismail accused distribution companies (Discos) of overcharging electricity bills, contributing to the country’s instability due to high power tariffs.

Meanwhile, Pakistan Business Forum (PBF) president Khawaja Mehboobur Rehman and its south Punjab chairman, Malik Talat Suhail, criticised power purchase agreements (PPAs) with IPPs, stating they were made without proper consideration, pushing the nation and industry towards economic collapse. The business community of south Punjab expressed these concerns at a press conference in Multan.

Mr Rehman said that contracts with IPPs mandate the procurement of a set minimum quantity of power, with Chinese IPP payables alone nearing $2 billion and the government currently finalising a payment schedule for these debts.

The PBF president demanded that the federal government conduct forensic audits of IPPs, including investment, technical, and financial audits, to identify any financial irregularities or potential criminal behaviour. He also called for a fuel audit to verify the accuracy of IPPs’ reported fuel usage and expenses.

Mr Suhail urged the federal government to renegotiate contracts with IPPs to address tariff adjustments, payment terms and contractual responsibilities. He suggested exploring alternative energy resources, promoting hydroelectric and renewable energy, and paying IPP owners in rupees instead of dollars to potentially save Rs5.5 trillion.

Published in Dawn, July 28th, 2024