Karachi, July 20, 2024 – Pakistan’s industrial sector is calling for a shake-up, with the Korangi Association of Trade and Industry (KATI) urging a dramatic shift in the country’s energy policy.
KATI President Johar Qandhari, in a fiery press conference, demanded an end to the excessive burden placed on citizens by Independent Power Producers (IPPs).
Prioritizing People Over Profits
Qandhari blasted the current system, stating, “The IPPs are receiving more money than Pakistan’s defense budget.” He emphasized that the well-being of the nation’s 240 million people should not be sacrificed for the benefit of “40 families” who run these IPPs.
Transparency and Reform
KATI demanded a forensic audit of IPPs and the cancellation of contracts with unnecessary private companies. Qandhari questioned, “Do we prioritize the interests of a select few, or do we care more for the vast majority of our citizens?” He argued that current policies disproportionately favor IPPs, hindering economic growth for the majority.
Reducing Costs and Empowering Consumers
Qandhari highlighted the underutilization of existing power generation capacity. He pointed out that despite a 45,000-megawatt capacity, only 22,000 megawatts are currently being used. He criticized the high cost of electricity, with consumers paying a hefty Rs. 18 per unit for unused capacity, pushing the economy towards a crisis.
To address these issues, KATI proposed a multi-pronged approach:
• Renegotiating contracts to shift from “Take or Pay” to “Take and Pay” agreements.
• Reducing management costs and revising capacity payment terms for government-owned IPPs.
• Negotiating debt restructuring with China for CPEC-related IPPs.
• Establishing a competitive electricity market where consumers can choose their providers based on price and service.
Lowering electricity prices from 16.5 cents to 9 cents per unit would significantly benefit both domestic consumers and industries. This decrease would translate to lower production costs, reduced inflation, increased exports, and ultimately, a more robust Pakistani economy.
KATI’s call for reform has resonated with key figures, with demands for government scrutiny of IPP contracts and independent audits gaining traction. With the economic burden on Pakistani citizens reaching a critical point, KATI’s proposals offer a clear path towards a more sustainable and equitable energy sector.