National Electric Power regulatory Authority (NEPRA) has notified a cumulative power tariff hike of Rs.1.82 by way of fuel power adjustment. The undesirable increase was inevitable to meet the pressing IMF condition of electricity price increase for the release of next tranche of $6 billion bailout package and reduce the fast swelling circular debt which has shot up to Rs.2.19 trillion. The liabilities of inflated tariff and idle capacity payment charges allowed to IPPs and regulatory flaws contribute 63 percent and technical losses in the ragtag transmission and distribution system add to the whooping circular debt. Increase in the original price of electricity and heavy doses of fuel price adjustments have neither reduced the bulging circular debt in the past nor does it will reduce it in future.
It is beyond the comprehension of electricity consumers as to why the national agreements with IPP leeches are open ended; the stakeholders of private power producers invoke international law for arbitration when payment disputes arise between NDTC and IPPs: and loan shark IMF poke its nose in these agreements. These disastrous agreements had been made by a previous government under the power generation policy of 1994. The Prime Minister has criticised that policy and agreements made under it but the government is reluctant to bring the shady electricity generation and purchase agreement of the past to limelight by bringing it to the parliament as observance of democratic norm. Are the two unelected powerful members of the federal cabinet, who owns major stakes in IPPs, are blocking revelation of whole truth about the shady agreements that is taking a heavy toll on the national economy?
President Federation of Pakistan Chambers of Commerce and Industry Mian Anjum Nisar has criticised the two successive increases in prices of petroleum products and frequent hiking of electricity tariff. These unwise moves have neutralized the interest rate cut of 625 basis points and abnormally jacked up the cost of production, wiping out the comparative advantage of exports. According to FPCCI President high cost of electricity is the major stumbling block in the industrialisation of the country. But who cares? Three cheers for IPPs stakeholders.