Former govts damaged energy sector beyond repair: President PEW

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Says power agreements crippled industry, agriculture and masses, demands forensic audit of IPPs, entire power system

ISLAMABAD: President Pakistan Economy Watch (PEW) Dr. Murtaza Mughal has said that former governments inflicted irreversible harm to the power sector by signing highly controversial power purchase agreements with the private sector that crippled masses, industry and agriculture.

In a statement on Sunday, he said the deals not only resulted in unbelievable profits for the private power sector but also increased tariff by 25 to 30 percent as compared to regional countries badly hitting the economy.

Dr. Murtaza Mughal said the former governments violated PPRA rules, third party audit system and established power plants hundreds of miles away from the source resulting in phenomenal losses.

Power production was focused while transmission and distribution was ignored that resulted in production of 38 thousand megawatts of electricity while the system was only able to transmit 16 thousand megawatts of electricity, he added.
President PEW said the government was bound to pay billions to the IPPs despite the fact that thousands of megawatts of electricity was not used by it. The former governments signed sovereign agreements with IPPs burdening masses and itself under unsustainable debt, he said, adding that the current government inherited Rs1.2 trillion in the infamous circular debt which has been doubled in its tenure.

The swelling circular debt indicated that inherited problems could not be resolved and it continues to haunt the economy, he noted.

Dr. Murtaza Mughal said that the action initiated by the government against IPPs seems to be stopped which must be initiated again and a forensic audit of the entire power system should be conducted to verify their claims.

In: Pakistan Economy WatchAuthor: pakistaneconomywatch