Govt scraps 10,000MW projects to curb costs

Claiming over Rs1.1 trillion in savings in revised contracts with existing independent power producers (IPPs), the government on Thursday announced a series of major decisions for reducing electricity rates, including the rejection of about 10,000MW of upcoming IPPs for being expensive and unaffordable. Speaking at a seminar on hydroelectric power in Islamabad, Power Minister Awais Leghari emphasised the need for bold decisions to address inefficiencies in the energy sector. He criticised K-Electric’s proposal for a Rs10.5 per unit tariff increase over the next seven years and ruled out power generation from projects such as the $14 billion Diamer-Bhasha Dam, citing their high costs to consumers. The minister also hinted at changing the taxation structure on electricity bills and eliminating the uniform tariff regime across the country to “incentivise everyone to do much better” instead of encouraging inefficiencies in the sector.