Thermal IPPs were setup under the Benezir Bhutto 1994 energy policy. These plants were to run on oil and were established for short period, that is 6 years only. It was envisioned that cheaper alternatives like coal, solar and hydro power plants will be added during these six years.
But due to a number of reasons the other power plants were never established and NEPRA used this excuse to renew the contracts for the IPP’s at the same high rates. While these power plants had lost their power producing capacity over the years.
Therefore in 2008 the PPP government asked USAid to provide new power plants to these IPPs free of cost. During all this time NEPRA failed to highlight the high contract costs, the low power producing capacity or cheaper coal or Hydro power plant construction options for Pakistan, while renewing the IPP contracts every six years.
All in all the IPP’s in collusion with relevant Government organizations have been leeching high profits from Pakistan even during extreme crisis situations like Earthquakes, Floods, Terrorism attacks etc. Since they never spared Pakistan, therefore the Government should not spare them.
Using the “Act of God” clause in such contracts the Government should end each IPP high costing contract. And than ask them to renegotiate a new contract, if they wish not to lose their whole investment in one day. The new contract should be much cheaper including discount of the past many years.
Shahryar Khan Baseer
Peshawar
