Power Minister’s Criticism:
Power Minister Awais Ahmad Khan Leghari criticized the Federal Board of Revenue (FBR) for its inefficiencies, stating that consumers are burdened with an Rs8 per unit tax on electricity. He mentioned that the power sector has become a tax collection agent due to the FBR’s failure.
Electricity Demand and Costs:
Electricity demand has dropped by 8% because of high prices, which include several taxes. Leghari noted that almost everything in the power sector is linked to the US dollar, and the rupee’s devaluation increases costs to power producers, equipment suppliers, and financial institutions.
Transmission Issues:
The power sector also faces challenges in delivering electricity due to problems with the transmission system, leading to the use of expensive plants instead of cheaper energy options.
Senate Committee Meeting:
During a meeting of the Senate Standing Committee on Power, chaired by PTI Senator Mohsin Aziz, questions were raised about setting up an imported coal-based power plant in Sahiwal. Leghari explained that the plant was established when Thar coal was not available and had lower capacity payments at the time.
Planning Criticism:
Senator Shibli Faraz criticized the lack of planning in the power sector, pointing out the illogical establishment of the Sahiwal plant based on someone’s wishes rather than economic and financial viability.
Local Coal Conversion:
Secretary Power Rashid Mahmood Langrial mentioned that imported coal-based power plants would gradually be converted to local coal over four years, potentially saving about Rs200 billion annually.
Audit of IPP Contracts:
Leghari ordered a detailed audit of independent power producers (IPP) agreements from the last three decades, following concerns raised by a Senate panel about the transparency and financial impacts of these contracts. The audit aims to identify any financial discrepancies due to changes in the agreements over time.
