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Reading: Former Commerce Minister Dr. Gohar Ejaz Exposes Flaws in IPP Payment System
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IPPs forensic audit
PhotoNews Pakistan > Pakistan > Former Commerce Minister Dr. Gohar Ejaz Exposes Flaws in IPP Payment System
Pakistan

Former Commerce Minister Dr. Gohar Ejaz Exposes Flaws in IPP Payment System

Web Desk
By Web Desk Published August 2, 2024 2 Min Read
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Dr. Gohar Ejaz, former Interim Minister for Commerce Photo Credits: AP
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Dr. Gohar Ejaz, former Interim Minister for Commerce, disclosed troubling inefficiencies within the Independent Power Producers (IPPs) sector. He highlighted that three power plants had received substantial payments of 20 billion rupees despite not generating any electricity.

During a recent press conference in Islamabad, Dr. Ejaz addressed an audience that included representatives from various chambers of commerce across Pakistan. He underscored the importance of public satisfaction for business prosperity and criticized the disproportionate influence of 40 individuals in the IPPs sector over the economic welfare of Pakistan’s 240 million populace.

Private sector IPPs are operating at an average capacity of 36% yet charge Rs 26.87 per unit in capacity charges. Ideally, these charges should be around Rs 8 per unit. This results in an annual overpayment of Rs 700 billion. If IPPs were compensated based on actual electricity… pic.twitter.com/KqpEhIoy1h

— Dr Gohar Ejaz (@Gohar_Ejaz1) July 27, 2024

He criticized the existing tariff structure, deeming it unsustainable, with domestic rates at 60 rupees per unit and commercial rates at 80 rupees per unit. Dr. Ejaz condemned the payment of 2 trillion rupees in capacity charges to IPPs, advocating for a system where payments are made solely for the electricity produced. He argued that capacity charges should be abolished, calling for more accountability in the sector.

A delegation of Federation of Pakistan Chambers of Commerce and Industry (FPCCI) comprising businessmen and office-bearers of 40 regional business associations, led by Dr Gohar Ejaz, called on President @AAliZardari at Aiwan-e-Sadr today.

Read More: https://t.co/1JCJbUELO1 pic.twitter.com/HPUSQk3wk1

— PPP (@MediaCellPPP) August 1, 2024

Moreover, Dr. Ejaz revealed his actions on July 1, raising electricity costs and efficiency issues. He expressed his trust in the Supreme Court to facilitate a forensic audit of the payments to IPPs. According to him, such an audit would likely bring all parties to the negotiation table with the government, correcting the current pricing discrepancies where payments are made at 100 rupees per unit versus the actual cost of 33 rupees.

In his concluding remarks, Dr. Ejaz reflected on his advocacy for the public and his past successes in court on behalf of the industry. During his tenure, he reiterated his commitment to fighting for subsidies and fostering improvements in the industrial and commercial sectors.

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