Power sector experts call for forensic audit of IPPs

Independent Power Producers (IPPs) continue to hurt country's economy as the owners of the plants are minting millions of rupees even without producing zero electricity, reported 24NewsHD TV channel.

According to power sector experts, IPPs are reluctant to undergo forensic audit despite several requests by the government.

Moreover, IPPs received billions of rupees from the government in the name of maintenance of the plants but spent not even a quarter of this amount on maintenance.

By taking advantage of ill-devised contracts, IPPs continue to collect billions of rupees from the government of Pakistan no matter they produce power or not. Compared to Bangladesh and Vietnam, IPPs installed wind plants of the same capacity with over four times more expensive in Pakistan.

The IPPS are reported to indulge in over invoicing. Despite coal reserves in Pakistan, IPPs are relying on imported fuels such as high-speed diesel and imported coal for power generation. IPPs did not generate as much electricity as the import fuel to receive billions of rupees subsidy.

Surprisingly, the government is also bearing the insurance of IPPs. The government also bore the expenses of setting up IPPs in the country. The government was providing facilities to IPP owners in terms of tax duty and insurance. Despite all expenses, the plants will not be owned by the government on expiry of the contract period. Most of the owners of the IPPs are local but deliberately the contracts were made in the name of some foreigners.

According to energy sector experts due to heavy payments to IPPs, the government is facing serious difficulties to invest in other important sectors. However, some IPPs are willing to negotiate with the government and reduce prices voluntarily.

The IPPs have made hundreds of times their cost, so contracts should be reviewed. Most of the IPPs in Pakistan are monopolized by a few influential families.