Chairman APTMA urges PM to cancel controversial agreements with IPPs

 Chairman APTMA urges PM to cancel controversial agreements with IPPs

LAHORE: Chairman All Pakistan Textile Mill Association (APTMA) North Kamran Arshad has urged Prime Minister Shehbaz Sharif to cancel controversial agreements with Independent Power Producers (IPPs) forthwith and save the industry from a total collapse, particularly the export-oriented textile industry.

He was addressing a press conference at the APTMA Lahore office. Senior APTMA North members and Secretary General APTMA Mohammad Raza Baqir were also present on the occasion.

He pointed out that the textile industry exports have registered four percent drop in the month of June 2024 compared with the corresponding period. The exports of textile industry are dwindling down fast due to the absence of Regionally Competitive Energy Tariff (RCET) of 9 cents/kWh, he said, adding that the industry was forced to pay 16 cents/kWh due to the exorbitant production cost of energy in the country.

He lamented that the exports are suffering heavily and minimum chances of growth ahead. Half of the industrial units have already closed down their operations, leading to job losses, increase in poverty and the economic collapse in the country.

This is right time for the Prime Minister to take a decision of cancelling agreements with IPPs and ensure RCET to the industry, he stressed.

He said the IPPs have received payments amounting to Rs1.95 trillion over the past year, including Rs46b to two IPPs with zero power generation and Rs370b to three plants for generating power at 15pc load factors. Due to these huge payments, he deplored that the government was buying electricity at Rs750 per unit from a power plant and Rs200 per unit from coal power plant.  He said power is being sold to consumers at Rs60 per unit because of the most controversial contracts, mismanagement and incompetence.

He further added that National Electric Power Regulatory Authority’s (NEPRA) data suggests that at least four power plants were receiving Rs10 billion per month without supplying a ‘single unit’ of electricity to consumers. He also urged the IPPs to renegotiate their contracts to alleviate the financial burden on the nation.

"with the government disbursing 140 billion rupees to a single plant operating at a 15% load factor, 120 billion to another at 17%, and 100 billion to a third at 22%." He pointed out that these three plants alone account for 370 billion rupees of the total expenditure.

He has expressed the hope that Prime Minister Shehbaz Sharif would hold a meeting immediately and get rid the country of the menace of IPPs.