The federal government should acquire independent power producers (IPPs) over the next few years if a review of the agreements signed with them is not possible, the Water & Power Development Authority chairman has said.
“Every agreement in the world has the possibility of a review. No agreement is water-tight, provided that both parties agree that the circumstances demand that we should review it,” Lieutenant General (retd) Sajjad Ghani said while appearing on Rubaroo aired on Aaj News on Saturday.
“If such a review is not possible from the IPPs, then my opinion and advice would be that in the coming years, the Government of Pakistan should acquire the more expensive IPPs themselves,” he added.
Many economic experts blame the past governments for signing expensive power agreements with the IPPs. According to economist Kaiser Bengali, the government was even paying for the electricity that was not produced.
The economist stated that the cost-plus revenue, capacity payments, and dollarised payments to IPPs were also a disaster.
Last month, the National Electric Power Regulatory Authority announced an increase of almost 20 per cent in the uniform national tariff to ensure about Rs3.8 trillion in funding for the 10 ex-Wapda electricity distribution companies (Discos) during the fiscal year 2024-25.
Amidst this, the Jamaat-e-Islami has been protesting for the last eight days in Rawalpindi against high electricity bills and IPPs agreement. The religiopolitical party has warned against marching towards Parliament House if demands were not met.
WAPDA Chairman Lt Gen (retd) Ghani was of the view that the government can acquire IPPs through public-private partnerships.
He described the power sector situation as “truly grave”, but added that Pakistan “will not sink”.
When asked, Ghani said that WAPDA does not have a special role in the electricity crisis as it neither transmits nor distributes power. “WAPDA is accepting all the allegations with a lot of innocence. WAPDA has no connection with today’s crisis.”
He said that the authority’s role was limited to building large dams, installing major projects, operating them, and generating electricity from them.
Ghani stated that the country’s largest hydropower projects were currently under construction and WAPDA’s power generation capacity was currently 9,500 megawatts, which the authority planned to more than double to 11,000 megawatts in the next five years.
When the additional capacity comes online, he said that electricity prices would become even cheaper and 11 million acre-feet of additional water would be available for agriculture.
“WAPDA is currently providing electricity at the rate of Rs4 per unit, even in the most expensive circumstances. The reason for the expensive units is some issues in transmission and distribution, including incompetence, theft, and dependence on IPPs,” he said.
Ghani was concerned that the hydropower is only meeting 25% of the country’s electricity needs, a situation he attributed to “four decades of lost opportunities.”
The last major dam, Tarbela, was constructed in the 1970s, while projects like Diamer-Bhasha and Mohmand Dam were only in the works, he said and added that dams like Kalabagh and Diamer-Bhasha should have been built in the 1980s and 1990s, respectively, to harness the country’s abundant hydropower potential.
From an economic standpoint, the WAPDA chairman said: “Kalabagh Dam remains the most viable and constructible project that could still be undertaken. The Mohmand Dam would be sufficient to cater to the energy needs of Peshawar.”
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He was of the view that political consensus was necessary to build dams to avoid flood-like situations after rains in the country.
In a response to a question, WAPDA Chairman Lt Gen (retd) Ghani stated: “The Pakistan Army is very sensitive about the matter that all affairs related to the country’s security should be overseen by the government in a manner that any state pillar does not become weak, in which the economy is a very strong and robust pillar.”
He added that WAPDA does not have to pay any net hydel profit to the Khyber Pakhtunkhwa government, as the payments were to be made by the Central Power Purchasing Agency (CPPA). “CPPA gives us the money and we then forward it to the province. Currently, CPPA’s due to KP is approximately Rs34 billion,” he added.
