Five major power generation companies, known as independent power producers (IPPs), in the energy sector are said to be receiving substantial “tax-free payments” under their contracts.

According to a report on the annual payments made to IPPs, the Hub Power Company, operating at 16% capacity, is receiving a staggering Rs260 billion in annual payments. The Engro Corporation, running at 54% capacity, is being paid Rs74 billion per year while the Lucky Group is receiving Rs62 billion annually for its 28% capacity utilisation.

The report further revealed that Sapphire is being paid Rs34 billion for 34% of its capacity and the power plants owned by Mian Mansha are running at 13% capacity but receiving Rs25.6 billion in annual electricity charges.

When contacted, sources at the energy ministry stated that such annual payments were made to the companies as per their contractual agreements. But they acknowledged that if any irregularities were found, appropriate action would be taken.

Energy expert Anjum Nadeem has expressed concern over the matter, stating that it was surprising that IPPs were not even liable to pay billions of rupees in taxes under the agreements.

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He questioned when the government would “wake up and stop the exploitation” of the people, stating that such agreements were more dangerous than the “East India Company deals” and a review of such agreements was imperative.

The energy expert said that the common people and the industry have been devastated by electricity bills and it was surprising that five major groups were receiving Rs560 billion with tax-free facilities.