Federal cabinet okays eight IPPs settlement agreements to reduce electricity price

ISLAMABAD: Months after five independent power producers (IPPs) “voluntarily” agreed to cancel their power purchase agreements (PPAs) with the government, the federal cabinet has greenlighted settlement agreements with bagasse-based power plants, a move that would save national exchequer Rs238 billion.

The federal cabinet meeting, under the chairmanship of Prime Minister Shehbaz Sharif, granted the approval on the recommendation of the Ministry of Energy and the Power Division, said a statement issued by the Prime Minister Office (PMO).

These bagasse-based power plants included DW Unit I, Unit II, RYK Mills, Chiniot Power, Hamza Sugar, Al-Moez Industries, Thal Industries and Chinar Industries.

The development came two months after the premier announced the pre-mature termination of power purchase agreements (PPAs) with the five oldest IPPs, with annual savings of Rs60 billion or around Rs411bn over the remaining term of their contracts.

The federal government was under immense pressure to reconsider its PPAs with the power plants following outcry across the country as the addition of capacity payment charges inflated the power bills beyond the affordability of the inflation-burdened masses.

During today’s meeting, the participants were informed that the Central Power Purchasing Agency (CPPA) would contact the National Electric Power Regulatory Authority (Nepra) regarding a reduction in the power tariffs produced by these power plants.

As a result of these agreements, electricity prices for the general public would decrease and the national exchequer would benefit by Rs238 billion rupees, the statement said.

Speaking on the occasion, PM Shehbaz said the incumbent government was taking all possible steps to reduce electricity prices for the common man.

He emphasised that national interests should always be prioritised in every decision and action, adding that the promotion of the private sector and industries in the country was a key priority for the government.

The federal cabinet was also briefed on the latest situation in Syria and the evacuation of Pakistanis stranded in the conflict-hit country.

The attendees were informed that out of 250 Pakistani pilgrims in Syria, 79 had reached Beirut, from where they would be brought back to Pakistan. Additionally, out of 20 teachers and students in Syria, seven teachers had also reached Beirut.

The meeting was further informed that the officials of the Pakistani embassies in Syria and Lebanon were taking all possible measures to ensure the safe return of Pakistanis from Syria.

Meanwhile, the cabinet also approved the appointment of Brigadier Asim Bashir Warraich as Member of Production Control on the Board of Heavy Industries Taxila, on the recommendation of the Ministry of Defence Production.

The federal cabinet also sanctioned the establishment of the National Commission for the Status of Women Fund, on the recommendation of the Ministry of Human Rights.

‘PTI’s civil disobedience enmity with Pakistan’

Addressing the cabinet meeting, the prime minister lambasted the Pakistan Tehreek-e-Insaf (PTI) for threatening the government to launch civil disobedience, terming the move an “enmity with Pakistan”.

Prime Minister Shehbaz Sharif has expressed satisfaction over the record increase in remittances and the reduction in the weekly inflation rate to 3.57%.

Expressing satisfaction over the rise in remittances, he said the development occurred despite the call for civil disobedience from a particular political party, adding that it reflects the trust of overseas Pakistanis in the government.

He also emphasised the need for political stability for economic development, saying that directions have been given to ensure that those who recently attempted to attack Islamabad will not be spared.

Referring to the foreign investment in the country, the premier noted that Azerbaijan would invest $2 billion in Pakistan. He mentioned that the Ambassador of Azerbaijan, during a meeting with him yesterday, emphasized that the projects should be identified and feasibility studies prepared so that the agreements can proceed.

About the situation in Syria, PM Shehbaz said Pakistan’s diplomatic position remained neutral on it.

He said a mechanism has been evolved for the safe evacuation of about 500 to 600 Pakistanis from Syria via Beirut after consultations with the Prime Minister of Lebanon.