The Islamabad Chamber of Commerce & Industry (ICCI) has lauded the move of the government to sign a basic agreement with the Independent Power Producers (IPPs) to reduce power tariffs and provide cheap electricity to the end consumers terming it a highly positive development that would help in bringing down the cost of doing business and facilitating the growth of business activities.

Muhammad Ahmed Waheed, President, Islamabad Chamber of Commerce & Industry said that electricity cost in Pakistan was very high in the region, which was a major cause of high production cost making our exports uncompetitive in the international market. He said that high power tariffs were also a discouraging factor for the potential investors as capital always moved towards the destinations where manufacturing cost was quite reasonable. He hoped that the agreement of the government signed with IPPs would pave way for reviving the business activities and attracting more local and foreign investment in the country.

ICCI President said that the power generated through expensive fossil fuel has the highest share in our energy mix and significant depreciation in the value of rupee against dollar has made great increase in energy cost due to which growth of industry was facing severe problems. He said that Pakistan has great potential to generate cheap electricity through hydro and other renewable sources and stressed that government should focus on enhancing the share of cheap power sources in its energy mix that would facilitate the accelerated growth of business and investment activities and put the economy on the path of sustainable growth.

Muhammad Ahmed Waheed said that transmission and distribution &T&D) losses in Pakistan were quite high as compared to international benchmark and to cover these losses, successive governments always resorted to the easy solution of increasing power tariffs for commercial and domestic consumers, but this approach has produced harmful consequences for the economy. Therefore, he stressed that government should bring drastic reforms in power companies to improve their performance and reduce their T&D losses. He said that government should consider privatization of power companies that would bring healthy competition in energy sector as has been witnessed in the banking and telecom sectors. He said that privatization of power companies would ultimately lead to the improvement in their companies and generation of electricity at competitive rates that would produce multiple benefits to the economy.