ISLAMABAD: Ahsan Zafar Bakhtawari, President of the Islamabad Chamber of Commerce and Industry (ICCI), has stated that the fundamental reason behind the escalating circular debt and increasing power tariffs resides in the power purchase agreements (PPAs) inked with Independent Power Producers (IPPs), necessitating payments in US dollars. He has urged the government to reconsider these PPAs with IPPs in order to facilitate payments in PKR.
He said that IPPs are earning huge profits in dollars, but the businesses are badly suffering due to exorbitant power tariffs and rising cost of doing business. He stressed that the government should change the basic tariff of IPPs in PKR instead of US dollars as this change would save billions of rupees of the national exchequer and provide electricity at affordable cost to the businesses making our export competitive in the international market. Similarly, the profits to the IPPs should also be paid in PKR instead of US dollars. He expressed these views during a media talk at ICCI.
Faad Waheed, Senior Vice President ICCI said that around 47 IPPs are working in Pakistan’s power sector and they have already earned huge profits as compared to their capital investment. As per Power Policy 1994, 16 IPPs had invested around Rs.60 billion and earned over Rs.400 billion, which shows their huge profits in Pakistan. He said that PPAs in Pakistan have made energy cost highest in the region and stressed that to save the industry from closure, the government should renegotiate PPAs with IPPs in the best national interest.
Khalid Iqbal Malik, Group Leader ICCI said that the government has made massive hikes in the prices of electricity, gas and POL products to meet the IMF conditions, but these anti-business measures have endangered the survival of businesses. He stressed that the government should withdraw the massive hike in power tariffs and prices of POL products to save the businesses from further closure.
He said that already the record high inflation has badly squeezed the purchasing power of the consumers causing great slump in the business activities while the unprecedented hike in the energy prices has made our industry uncompetitive in the world market. He stressed that the government should engage the private sector in consultation to rationalize the energy prices in order to save the businesses from total collapse.
Zafar Bakhtawari, former President ICCI and Secretary General UBG said that due to significant depreciation of rupee, import of industrial raw materials has become very expensive which is pushing up the production cost. He stressed that the government should take urgent measures to stabilize the value of rupee in order to save the industry from further troubles. He said that instead of hiking the power tariffs, the government should focus on controlling the transmission & distribution losses and power theft besides improving the performance of power companies to save the consumers from further burden.