The government has decided to investigate the challenges faced by Independent Power Producers (IPPs) and implement measures to reduce electricity generation costs. This decision, announced jointly by the Minister for Power Division Sardar Awais Ahmad Khan Leghari and Special Assistant to the Prime Minister, Muhammad Ali, comes as part of a broader strategy to enhance the efficiency and affordability of the nation’s power sector.
The announcement follows an internal meeting focused on the current issues plaguing the power sector. Minister Leghari revealed that, on the directives of Prime Minister Shehbaz Sharif, a dedicated task force has been established to oversee the implementation of structural reforms in the power sector. This task force is set to evaluate and address all aspects related to improving the sector’s performance and sustainability.
Sardar Awais Ahmad Khan Leghari has been appointed as the chairman of this task force, tasked with leading the efforts to drive comprehensive reforms. The task force will be responsible for scrutinizing all power sector issues, including those related to IPPs and the overall generation cost of electricity. The goal is to ensure that all government institutions work in unison to implement these reforms effectively and in accordance with the outlined objectives.
Leghari emphasized the urgency of the situation, stating that the government has limited time to deliver tangible results to the nation and consumers. Since the current administration under Prime Minister Shehbaz Sharif assumed office, it has been actively working on identifying and addressing key areas requiring reform. Approximately 20 to 22 critical points for improvement have been identified, forming the foundation of the proposed structural changes.
Muhammad Ali, who will serve as the co-chairman of the task force, has been assigned an office within the Power Division to facilitate regular interactions with the Minister. He highlighted that the task force’s first meeting took place on Thursday and confirmed that future meetings would be held daily. The task force’s Term of Reference (TORs) have been established, outlining its responsibilities and objectives, including the crucial task of examining IPP-related issues and devising strategies to lower electricity generation costs.
One of the central challenges the task force will address is the issue of circular debt, which has long been a significant financial burden on the power sector. Additionally, the privatization of Distribution Companies (Discos) and the commercial handling of electricity are key issues that need resolution within the next 18 months. The government also plans to shut down five of its own power generation plants, totaling 2,500 MW, as part of its strategy to optimize power generation and reduce excess capacity.
Minister Leghari underscored the importance of the power sector as the backbone of Pakistan’s economy. The government’s commitment to implementing reforms is driven by the need to enhance the sector’s efficiency and ensure that power supply remains reliable and affordable for all consumers. The reforms are expected to address inefficiencies, improve service delivery, and ultimately lead to a more sustainable and economically viable power sector.
The establishment of the task force and the comprehensive approach to reform signal a significant step forward in tackling the challenges faced by Pakistan’s power sector. By focusing on key issues such as IPP contracts, generation costs, and circular debt, the government aims to create a more efficient and financially stable power sector that can better serve the needs of the nation.
