Govt approves to revise pacts with 14 IPPs to slash power cost

Islamabad: The federal cabinet on Tuesday approved the power division’s recommendation to revise the agreements (negotiated settlement agreements) with 14 Independent Power Producers aimed at reducing electricity costs and saving Rs 1.4 trillion for the national exchequer.

After discussion with the 14 IPPs under the revised agreements, the cabinet approved the recommendation of reductions of Rs 802 billion in terms of profit and cost of the said IPPs. An amount of Rs 35 billion in excess profits from previous years will be deducted from these IPPs.

The meeting of the cabinet was held here under the chairmanship of Prime Minister Muhammad Shehbaz Sharif at the PM House.

It was told in the meeting that of these IPPs, 10 operate under the 2002 Power Policy, while four others were established under the 1994 Power Policy. Besides, an agreement with one IPP from the 1994 policy has been canceled.

These revised agreements are projected to save the government Rs 1.4 trillion over their applicable duration, with annual savings of Rs 137 billion, that will benefit power consumers, the meeting was informed.

On the occasion, the prime minister lauded this achievement, highlighting that it would reduce circular debt, lower electricity prices, and lead to significant national savings.

On conclusion of successful revised agreements, he appreciated the performance of the Power Minister, Advisor, and Secretary, and the members of the Task Force that was established in this regard.

The cabinet, on the recommendation of the committee formed with regard to the government’s right-sizing initiative, approved the merger of the Ministry of Narcotics Control into the Ministry of Interior Division. After the merger, the Narcotics Control Division will function as a wing under the Ministry of Interior, while the Anti-Narcotics Force will operate as an attached department.

This integration is expected to save Rs 183.25 million annually in administrative and operational expenses.

Similarly, the cabinet also approved the merger of the Aviation Division with the Ministry of Defence, which will save Rs 145 million annually in in term of salaries, office expenditures and other administrative costs.

The cabinet was informed that that civil aviation affairs were previously under the Ministry of Defence until 2013, so keeping in view the government’s austerity policy, the Aviation Division is being merged again with the Defense Ministry. This step is expected to improve airspace management.

On the recommendation of the Cabinet Division, the cabinet approved the inclusion of a new Section 45-A in the Public Procurement Rules, 2004, allowing a procuring agency to delegate the entire procurement process or part of it to another procuring agency.

The cabinet also endorsed the recommendation of the Ministry of Human Rights to send the National Commission for Minorities Act 2024 to Parliament for approval.

The cabinet approved the Ministry of Law and Justice’s proposal to extend the employment contract of Dr. Muhammad Bashir as a Technical Member of the Environmental Tribunal, Islamabad, for an additional two years.