‘First IPP’ offers to revisit contract

KARACHI: Amid increasing pressure from the public and the business community to review power contracts to end unjustified capacity payments, an independent power producer (IPP) has announced that it is submitting proposals to the federal government to lower electricity prices and adjusting its rate of return from US dollars to the local currency.

Shaharyar Chisti, chairman of Pak Asia Investment, the parent company of Liberty Power, told a press conference on Wednesday that there is a need for a collective effort to provide relief to the people by reducing electricity prices. He also asked the power plants to find a solution for cutting electricity costs. He also offered to renegotiate its contract with the government, besides showing interest in shifting from dollar-based capacity payments to transactions entirely in rupees.

The company has also hinted at reducing its profit margins to help ease the country’s financial burden.

He said there is a need to reexamine the system as unaffordable electricity costs affect the viability of power-producing companies. At the same time, a significant portion of capacity charges is attributed to fuel costs.

He pointed out that removing the government’s gas development surcharge would further reduce electricity costs.

Liberty Power Chief Executive Officer Imran Ahmed said the plant operates on raw gas directly sourced from local gas fields. He said Liberty Power could generate power at a lower cost if the government ensures that raw gas is supplied from other fields.

Published in Dawn, September 12th, 2024