Ahsan Zafar Bakhtawari, President Islamabad Chamber of Commerce and Industry has said that the country has suffered immense irreparable damage due to the Independent Power Producers (IPPs) which have not only made Pakistan indebted , but has made the lives of masses problematic, restlessness and miserable.

In a statement issued here on Saturday he demanded that the federal government should immediately revisit all the contracts with IPPs and procure electricity from cheaper sources without capacity charges, adding that the crippling impact of high electricity tariffs is the widespread industrial closures and substantial job losses.

He said that the main reason for the electricity crisis in Pakistan is the contracts made with Independent Power Producers (IPPs) along with electricity stealing and the consequences are always borne by the traders and the people in the form of non-availability and expensive electricity. The federal government should formulate a strategy to deal with IPPs and ensure affordable electricity prices for industries and domestic users in the national interest.

ICCI President blamed 1994 Power Policy for trapping Pakistan’s energy sector in unfavorable contractual agreements with IPPs, leading to a spiraling circular debt that reached PKR 2.64 trillion by February 2024 and the dollar-linked guarantees benefit IPPs at the expense of the government and the public. Any depreciation of the Pakistani rupee translates to higher returns for IPPs, further straining the national budget.

He said that the total capacity production of the IPPs is 48000 MW and yesterday’s ( Friday ) production was 20,000 MW whereas the demand was 22000 MW and the question is as to where the rest of the production is being used, adding that country’s total defence budget is Rs.2150 billion but astonishingly Rs. 2500 billion have been earmarked for the IPPs.

He went on to say that during last two days Rs.10/- per unit has been increased for domestic consumers and Rs. 18/- for commercial units. Moreover, the peak hours’ time has been enhanced by two hours which led to Rs. 12 billion burden on the consumers.

Consumers have to pay Rs.1500 billion due to the fixed tax from Rs. 200 to Rs.1000 . Furthermore the consumers are paying Rs. 2 billion due to the overbilling.

He warned that the recent surge in electricity prices could lead to social unrest and businesses frustration. To address this situation, the ICCI proposes a comprehensive review of IPP agreements, price reevaluation within legal boundaries, and stricter oversight to prevent overbilling.

He demanded that all those who entered into these agreements and benefited from them should be investigated and punished as per the law so the supply of cheap and quality electricity to the people and the business community can be made possible.