- Advertisement -
ISLAMABAD, Apr 4 (APP):Minister for Power Division Sardar Awais Ahmed Khan Leghari on Friday expressed the hope that owing to ongoing dedicated efforts of the government led by prime minister Shehbaz Sharif, the electricity prices would further witness significant reduction over the next three to four years which would help play a crucial role in fostering the country’s economic development.
Briefing the media on the PM’s recent announcement on the reduction of electricity prices, the minister said macroeconomic volatility including exchange rate, interest rate, fuel prices, expensive fixed components of power plants, inefficient capacity addition and lack of transmission planning contributed to the high generation cost of electricity.
However, the government saved Rs 3,696 billion through termination of inefficient power plants, termination of contracts and negotiations with various Independent Power Producers (IPPs). The said saving would ultimately be passed on the consumers, he added.
The minister said that negotiations were also being carried out with remaining IPPs to explore tariff reduction through mutually agreed revision of contracts. He said in future procurement of electricity would be based on least-cost basis and plants would be set up on Indicative Generation and Capacity Expansion Plan (IGCEP). The government would be moving out from single buy electricity model, he added. A proper proposal would be presented to the PM in next few weeks in this regard, he said.
Awais said that cheap electricity could also be provided to the consumer in case there was no transmission constraints. All out efforts would be made to remove transmission system constraints which would help reduce power tariff, he added.
He said international lenders would be requested to provide funding for removing transmission system constraints besides completion of Rahim Yar Khan-Mitiari transmission line.
The minister said that power distribution companies (DISCOs) would be privatized in phases. In the first phase, three DISCOs- Islamabad, Faisalabad and Gujranwala Electric Supply Companies would be privatized while in 2nd phase Lahore, Multan and HAZECO Electric Supply Companies would be privatized. Concession model would be adopted for Hyderabad, Sukkur and Peshawar Electric Supply Companies, he added.
The minister said that Quetta and Tribal Electric Supply Companies would be retained for improvement and would be offered for management contract. He said that in Balochistan, Rs 55 billion were being invested to switch over 27000 agri tube wells on solar energy. Privatization of Guddu and Nandipur power plants was also underway, he added. He said Power Planning and Management Company (PPMC) has been set up in order to act as policy and technical arm of Power Division.
He went on to say that inefficient GENCOs were also being terminated. He said that circular debt stock of Rs 2.4 trillion would be eliminated in next 6 years.
To a question, the minister said that talks were also going on with power plants set up under China Pakistan Economic Corridor (CPEC) for converting into local coal and re-profiling of loans for these plants.