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Sunday, November 26, 2023

NAB Clears the Government-IPPs Deal!

NAB investigation in the government-IPP deal was worrying the IPPs. Chairman congratulates the government on reaching the agreement.

National Accountability Bureau (NAB) has given green signal to the deals between Independent Power Producers (IPPs) and the Government of Pakistan (GoP) after a detailed meeting with the Government’s Negotiation Committee.

On Thursday, IPPs were taken by the sudden interest of NAB in the deals signed, fearing that the investigation may lead to the deals being jeopardized.

The NAB Lahore wrote a letter to Secretary Power, Ali Raza Bhutta, on February 10 seeking details of the deals signed with the 47 IPPs by February 18, 2021, which put unnecessary pressure on bureaucracy. It took the matter to the highest level.

Some of the IPPs think that the investigation may have been prompted by someone in the government.

However, on Thursday, the NAB team cleared the air on the issue, by issuing a press release saying they had briefed the NAB chairman Mr. Javed Iqbal on the deal made. They also told him about an arbitration agreement clause added to these agreements leading to government saving Rs. 55 million on the deal.

According to NAB, this investigation was done keeping in mind the weaknesses found in the deals between governments and IPPs. They said in the press release,” the strategy of NAB proved advantageous and beneficial which resultantly brought savings of billions of rupees to the Government of Pakistan.”

Chairman NAB appreciated the efforts of Negotiation Teams and the whole process which have extracted Rs. 836 Billion saving from the remaining terms of these IPPs. NAB absolutely denied the reports in few media circles that NAB is finding wrongdoing on these revised IPPs contracts.

Read More: NEPRA approves an increase in electricity prices

A ray of Hope

A few weeks ago, the former Special Assistant to the Prime Minister (SAPM) on Power, Tabish Gauhar, stated that the government has taken several measures to reduce circular debts and tariffs. He also revealed that that the MoUs that the government had signed with 53 IPPs are now in the final phase and will be converted into agreements within the next few days.

According to Mr. Gauhar these agreements will reduce the financial burden of Rs. 836 billion over the next two decades, while the money owed to the IPPs, with the value of Rs. 450 billion will also be along with interest will be paid this year.

SAPM on Power added that these agreements would lead to lowering of the electricity prices by Rs. 1-2 per unit over the upcoming years.