THIS is with reference to the report “Govt renegotiating IPP deals to rein in ‘unsustainable’ tariffs: Awais” (Sept 8), which indicated that the changes may include cutting returns, capping dollar rates, and moving away from paying for unused power.

While the energy minister has rightly called the power tariffs becoming unsu-stainable, his assertion that the pheno-menon of ‘unused power’ has arisen due to fall in power demand/usage caused by power tariff reaching unsustainable levels is not the whole truth.

The matter of fact is that either reck-lessly or prompted by the lure of hefty paybacks, commission, excessive/unearned profits or whatever, contracts have been signed for energy levels way above even the peak demand, actual or even foreseeable.

Moreover, another major flaw in the present negotiation process is the absence of a performance audit of the independent power producers (IPPs) by independent experts/firms of repute to set a benchmark to compare the actual performance of the IPPs with, and to quantify the findings, as suggested by entrepreneurs as well as industrialists.

As such, such an audit may even reveal irregularities, bordering on criminality, by some of the IPPs, which could be used as evidence to confront the IPPs concerned, and to negotiate cessation of their contracts accompanied perhaps with demand for the return of the sum involved.

The political parties that have mostly signed these contracts with the IPPs had years of experience when they signed the contracts, and yet the mess they caused in the country was, and is, hard to believe. Surely, the masses will not feel safe seeing the same lot do another round of negoti- ations with the IPPs.

The Special Investment Facilitation Council (SIFC) is assisting and advising the government on many a front. It must get involved in the process to ensure that the matter of IPPs is handled properly.

S.R.H. Hashmi
Karachi

Published in Dawn, September 15th, 2024