KARACHI: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) released a press statement on Friday, expressing concern over the electricity tariff hike and disconnection of gas for the industry.

The President of FPCCI, Mian Nasser Hyatt Maggo, said that instead of reforming the energy sector, decisions made will be detrimental to the domestic industry. “The much-awaited outcome of negotiations between IPPs and government which was considered to be directed towards the reduction in base tariff does not assure any decrease in the base tariff,” the statement read.  

He further said that the spokesman on the energy has attributed the need of tariff hike due to bad and corrupt agreements made with IPPs in the past. If so, such situation requires to be corrected through invoking all the civil and criminal remedies to correct the agreements by excluding the pay-or-take, reducing O&M cost, converting the repatriation cost from dollar indexation to rupee and relevant recommended measures in the report.

He said that while appreciating the present government in ordering the inquiry in respect of agreement with IPPs, the outcome does not appear to be reciprocating for base tariff reduction and availability of electricity sale at a reduced cost. 

“The announcement of Rs. 40 billion per year off-take of the financial burden on Government is marginal even against the presently announced tariff base hike,” the statement said, “wherein one rupee hike is overcharging consumers of Rs. 100 billion on the consumption of electricity.”

President FPCCI also said that such irregular increase in tariff is coming in the way of economic development, in specific loaded by the carried forward adverse effect of COVID-19. The hike, if it is linked to any part of the memorandum of understanding with IMF, can be fairly convinced for freezing such tariff hike when IMF itself projected low economic growth. Such duplicity cannot be justified.

Mian Nasser Hyatt Maggo proposed an extension in the time period to be provided in order to allow a shift grid power. He said that the penalty of bad agreements with IPPs on capacity and take-or-pay clauses are being shifted to the industry with their self-generation through captive power plants which basically is assurance for reliability and uninterrupted supply.


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