Pakistani parliamentary committee calls for accountability of Independent Power Producers
Aug 28, 2024
Islamabad [Pakistan], August 28 : A Pakistani parliamentary committee on Tuesday raised concerns over lack of transparency in contracts of the Independent Power Producers (IPPs) in Pakistan and demanded that the Ministry of Energy initiate a forensic audit into the matter, Pakistan-based Dawn reported.
The Senate Functional Committee on Devolution chaired by Pakistani Senator Zarqa Suharwardy Taimur expressed severe concerns about the functioning of IPPs and the lack of transparency in their contracts. Notably, bringing down the prices of electricity in the country is one of the most crucial issues in Pakistan.
In her statement, Taimur mentioned that the IPPs have caused significant problems for the people and must be held accountable for their actions. She also directed that details of standard contracts of IPPs, and a list of the percentage of capacity be provided to the committee immediately, according to Dawn report.
Currently, the issue of IPP non-transparent contracts is being highlighted by Pakistani political parties and the trader community, demanding that the government rethink the agreements that have been signed with them as it is crucial in the interest of the public and industries to bring down the electricity tariffs.
Earlier in July, Jamaat-I-Islami Pakistan held a sit-in in Rawalpindi and called on the government to revise its policy on electricity to provide relief to the citizens of Pakistan. The members of the parliamentary committee also highlighted the need for a system to be set up for addressing the over-employment of the workforce within the Ministry of Inter-Provincial Coordination (IPC).
Previously, another report by the Dawn quoting its local source had highlighted that, despite a major burden on the taxpayers in Pakistan the IPPs in the country have received substantial tax breaks of PKR 1.217 trillion from the mid-1990s to 2023-24.
According to the same Dawn report, the tax exemption PKR 2.091tr given to these IPPs has gone beyond the capacity of payments in the current fiscal year. Additionally, these IPPs in Pakistan are owned by 40 influential families in the country having direct or indirect connections to major leaders in the powerful government.
Official records available quoted by the Dawn report stated that governments repeatedly provided data of providing tax exemption to IPPs in economic surveys until 2018-19, however, when the value of tax exemptions given to IPPs in Pakistan increased, the publishing of related data was stopped.
