Recall that the government depends on the electricity industry for its revenue and that the majority of IPPs are controlled by “people in power.”
KARACHI: The government has designated petroleum and electricity as “sources of revenue generation,” so there is little chance that the high cost of electricity will decrease in the nation. Meanwhile, independent power producers (IPPs) have “freehand without any check and balance” over their outputs, performance, and contracts with the government.
Experts discussed this at a media briefing on Thursday at the Applied Economics Research Centre (AERC), University of Karachi. The event was titled Pakistan Energy Crisis and IPPs: How Overbilling Impacts Quality of Life and Pathways to Solution.
The experts added that the nation’s middle-class and lower-class households are being severely impacted by the crisis of overbilling and high electricity costs, which is having an adverse effect on their spending on food, transportation, health care, and education.
According to Dr. Aamir Siddiqui, an assistant professor at AERC, the government has turned gasoline and electricity into a means of generating income, therefore electricity prices are unlikely to decrease very soon. With almost 100 IPPs across the nation, he claimed that power prices ought to be at least steady, if not lower, given the volume of suppliers. However, they are continually rising.
He continued by saying that even though Pakistan is producing more electricity than is needed, load shedding is being used. Despite the fact that the IPPs are paid in dollars or sums equivalent to the dollar exchange rates, the government does not care to negotiate with them or to amend the agreements with them in order to improve their quality and services.
The Social Policy and Development Centre Karachi’s main economist, Dr. Muhammad Sabir, stated that energy rates would not decrease unless the government put the needs of the people ahead of its own.
He claimed that the majority of the deals with the IPPs were signed “without thinking” about how the public would benefit, and that the IPPs who are not providing any power at all are also receiving “full payment.”
