THE Independent Power Producers (IPPs) in Pakistan, nearly eight dozen in number, have increasingly become a significant factor in the country’s economic distress. These entities, established with the intent to bridge the gap between electricity demand and supply, have instead contributed to draining national resources. Recent revelations have shed light on the alarming extent of this issue, indicating a deeper, long-standing exploitation that demands immediate attention.
A recent report has unveiled that over the past decade, 26 IPPs operating on imported fuel have been paid over PKR 1200 billion. This staggering amount is just the tip of the iceberg, with further data expected to emerge in the coming months, which may paint an even grimmer picture. What makes this situation particularly concerning is the fact that these payments were made despite significant technical issues and frequent shutdowns at these power plants.
The Central Power Purchasing Agency (CPPA) revealed that these IPPs received payments regardless of their operational status, even when they were non-functional or only operated sporadically. Despite being mostly inactive, these plants continued to receive hefty capacity payments, a policy that has now come under severe public scrutiny due to the relentless increase in electricity tariffs. This situation raises critical questions about the sustainability and fairness of such agreements, which have been allowed to persist unchecked for years.
The exploitation by IPPs, however, is not a new phenomenon. It has persisted for decades, largely because the individuals and entities with the authority to address it were themselves beneficiaries of these exploitative practices. The continuous and unchecked depletion of national resources through these IPPs has contributed significantly to the economic challenges Pakistan faces today. The recent public outcry over skyrocketing electricity prices has finally brought this issue into the spotlight, but the question remains: why was this exploitation allowed to continue for so long?
It is now imperative that the nation be freed from this cycle of exploitation and injustice. The contracts with non-essential and inactive IPPs must be terminated immediately, and new agreements with the remaining IPPs should be renegotiated under fair and transparent terms. Furthermore, the details of these agreements should be made public to ensure transparency and accountability as these are the most effective tools in safeguarding national resources from misuse and corruption.
In addition to addressing the issues with IPPs, it is crucial to eliminate electricity theft completely. While the Federal Minister of Energy has indicated that efforts are ongoing in this regard, the public’s trust will only be restored when these efforts yield tangible and positive results. The end goal must be a fair and just energy sector that serves the interests of the nation and its people, rather than a select few who have long profited at the expense of the country’s economic stability.
—The writer is contributing columnist, based in Turbat, Balochistan.
