Government disbursed Rs450b to IPPs in first quarter of 2024

ISLAMABAD: In the first three months of 2024, it was disclosed that the government disbursed Rs450 billion to independent power producers (IPPs).

Former caretaker Minister of Industry and Production of Punjab Rana Tanveer Hussain revealed the information during a media briefing, highlighting concerns over the substantial payments made.

Read more: APTMA demands forensic audit and review of IPP agreements

Tanveer pointed out that these payments included Rs2.6 trillion in capacity charges, even to IPPs that were not actively generating electricity. He said that this amount surpassed the national defense budget.

Tanveer lamented the adverse impact of these payments on the public and industries, noting a decline in employment opportunities and a rise in business closures. During his tenure as caretaker minister, he claimed to have urged the federal government to urgently address the situation, warning of dire consequences if left unresolved.

Highlighting the government’s significant ownership stake of 52 per cent in IPPs, including investments from China, Tanveer called out the government to address the issue internally first. He also called for an immediate audit of IPPs to ascertain the validity of agreements and proposed resolving any disputes through negotiation.

Tanveer further criticised the government’s committee formation process, expressing disappointment over their ineffectiveness in addressing critical issues. He urged the government to take a proactive approach, including conducting a forensic audit to ensure transparency and accountability in financial transactions related to IPPs.

Read more: Ministry discloses costly agreements with IPPs

The former minister acknowledged the government’s efforts to establish a committee for negotiations with IPPs. However, he said that concrete action and sincere efforts were needed to resolve the ongoing financial issues properly.