Federal Energy Minister Awais Leghari on Monday reaffirmed the government’s commitment to “transparent and fair negotiations” with independent power producers (IPPs), stating that IPPs can “either engage in talks or opt for arbitration and forensic audits” to resolve disputes, according to a statement from the Ministry of Energy.
Negotiations with the IPPs in the country so far are expected to save the government Rs1.4 trillion, with an annual saving of Rs137 billion, benefiting power consumers.
Federal cabinet approves proposal to revise agreements with 14 IPPs: PMO
Earlier, M/s Sapphire Electric Company Limited (SECL) claimed that sovereign power contracts were being negotiated forcibly, offering termination of sovereign contracts and doing away with capacity payment if their proposals were accepted by the government.
The assertion was conveyed by the company’s Chief Executive Officer (CEO) Shahid Abdullah in a letter to Prime Minister Shehbaz Sharif, which was contrary to what is claimed by the Task Force on Energy that everything is being done with mutual consent.
IPP claims contracts being negotiated ‘forcibly’
Similarly, the federal cabinet earlier approved a proposal of the Power Division to revise agreements (negotiated settlement agreements) with 14 IPPs, a statement from the Prime Minister’s Office (PMO) said.
The revised agreements would include a reduction of Rs802 billion in profits and costs for the IPPs, with Rs35 billion being deducted from their excessive profits over previous years, it added.
“Out of these, 10 IPPs were established under the 2002 policy, while 4 were set up under the 1994 policy. Additionally, the agreement with one IPP under the 1994 policy has been canceled,” the statement read.
