The Pakistani government is currently facing significant scrutiny over the operations of independent power producers (IPPs), particularly those established under the China-Pakistan Economic Corridor (CPEC). Recent investigations have led to claims of “additional profiteering” by these power plants. As a result, 13 IPP owners have been summoned to Islamabad to present their financial reports. Special Assistant to the Prime Minister on Power Division, Muhammad Ali, is reportedly playing a central role in this probe.
This move follows a directive from the Senate’s Functional Committee on Devolution, chaired by Dr. Zarqa Suharwardy Taimur, which called for a forensic audit of the IPPs due to concerns about their operational transparency and the impact on electricity bills. Public discontent over high electricity tariffs has fueled demands for renegotiations of the IPP contracts, with Jamaat-e-Islami staging a 14-day sit-in in Rawalpindi to press for changes.
Despite the ongoing probe, Energy Minister Awais Leghari has cautioned against unilateral alterations to IPP contracts. He has warned that such actions could have severe repercussions, similar to the Reko Diq mining dispute, due to the sovereign guarantees backing these agreements. The government is reportedly seeking concessions from Chinese IPPs and aims to address the high electricity tariffs through comprehensive negotiations.
The Power Division has refuted claims that IPP owners have been formally summoned, stating that no such directives have been issued. They emphasize that discussions with IPP owners are part of an ongoing process and no unilateral actions are being planned. Additionally, the government is exploring options to reduce capacity payments and profits for state-owned power plants while re-profiling its debt to China, with support from the International Monetary Fund (IMF).
