The government has reportedly disbursed approximately Rs1 trillion in capacity payments to 26 independent power producers (IPPs) using gas, RLNG, and RFO over the past decade, starting from 2015, Business Recorder reported.

Documents reveal that these IPPs were established under various power generation policies before 1994, as well as in 1994 and 2002.

Earlier this month, the National Assembly’s Standing Committee on Energy sought a detailed report on capacity payments to the IPPs.

Many politicians have blamed such payments for the exorbitant electricity bills which many people received in the summer seasons.

Of the total payments, Rs536.3 billion was allocated to gas and RLNG-based power plants. Notable recipients include Fauji Kabirwala, which received Rs14.271 billion, and Liberty Dharki Power Limited, which got Rs25.5 billion. Other significant amounts were paid to Rousch Pak Power Ltd (Rs60 billion), Uch Power Limited (Rs77.314 billion), and Uch-II (Rs120.137 billion).

Moreover, the Hub Power Company Limited received Rs205.034 billion, while Kot Addu Power Company was paid Rs167 billion. Payments also included amounts to Kohinoor Energy (Rs15.087 billion), Lalpir Energy (Rs52.081 billion), and Nishat Power Limited (Rs39.791 billion), among others.

In a recent Senate panel meeting, Senator Shibli Faraz raised concerns regarding substantial capacity payments made to Rousch Power Limited, Uch Power, and Hub Power Company, which are linked to former commerce minister Abdul Razak Dawood.

Officials from the Central Power Purchasing Agency-Guarantee clarified that such payments were based on the generation capacity of the respective plants. They also added that detailed information about the capacity payments has already been provided to the committee. But they stated that retrieving data from the past 10 years would take additional time and they requested one month to compile and submit this information to the committee.

State Finance Minister Ali Pervaiz Malik has claimed that capacity payments made to the IPPs were being ‘hyped up’.

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“Five per cent of the capacity charge which is less than 100 billion is that you attribute to the IPPs. So I don’t think its materiality is like it has been hyped up,” he said while appearing on Dus aired on Aaj News on August 17.

While sharing the breakdown, the state finance minister said that half of the IPP problem started because the Government of Pakistan and various provincial governments put up thermal generation plants at record prices and at record speed after the 2014-15 policy.

“Rest, 45% of the capacity charge is of CPEC projects which are imported coal plants at Port Qasim, in Sahiwal and the rest of the plants. Nuclear also comes in this bucket,” Malik said.