Revised IPP Agreements Approved by Cabinet to Lower Electricity Prices by Rs11
The federal cabinet, led by Prime Minister Shehbaz Sharif, has given the green light to revised agreements with 14 Independent Power Producers (IPPs), a move that could potentially slash electricity prices by up to Rs11. This groundbreaking decision comes on the heels of a recommendation by the Power Division to revisit the contracts with these 14 IPPs. As a result of the renegotiated agreements, a staggering reduction of Rs802 billion in profits and costs for these IPPs has been sealed.
Saving the National Treasury
In a bid to further alleviate the financial burden on consumers, an additional Rs35 billion will be snipped from the excess profits amassed by these IPPs over the years. Notably, ten of these IPPs are currently operating under the 2002 power policy, while the remaining four fall under the 1994 power policy. Moreover, one IPP governed by the 1994 policy will see its contract terminated as part of the revised agreements.
A Win-Win Situation
The revised agreements with the IPPs are projected to result in total savings of a whopping Rs1.4 trillion over the duration of the contracts, translating to an annual saving of Rs137 billion. Prime Minister Shehbaz Sharif lauded this move as a major triumph, emphasizing that it not only spells salvation for the national treasury but also promises to chip away at the circular debt conundrum while pushing electricity prices down.
Merger Mania
In a bid to streamline operations and trim excess fat, the cabinet also gave the nod to the merger of the Ministry of Narcotics Control with the Ministry of Interior. This strategic move is expected to yield an annual saving of Rs183.25 million in administrative costs, salaries, office upkeep, and other operational expenses.
Furthermore, the merger of the Aviation Division with the Defense Division has been approved, aiming to enhance airspace management and deliver annual savings of Rs145 million in operational costs. These mergers underscore the government’s commitment to fiscal prudence and efficient governance.
Additional Cabinet Approvals
In a flurry of proactive decisions, the cabinet also greenlit the addition of Section 45-A to the Public Procurement Rules, 2004, empowering procuring agencies to delegate procurement processes to other entities. Moreover, the National Commission for Minorities Act 2024 was given the green light for submission to Parliament, following a recommendation by the Ministry of Human Rights.
Additionally, Dr. Muhammad Bashir’s contract as Member of the Technical Environment Tribunal, Islamabad, has been extended by two years, as per the Ministry of Law and Justice’s counsel. These decisions underscore the government’s commitment to transparency, efficiency, and financial prudence in governance.
