MPs for resolving Rs32.45b payment issue of IPPs in 2 weeks

ISLAMABAD – The Senate standing committee on finance on Tuesday directed the Power Division to resolve the issue of the payment of Rs32.45 billion to the IPPs under idle/unutilised capacity with the Auditor General of Pakistan within two weeks, saying otherwise the matter will be forwarded to the National Accountability Bureau (NAB) for inquiry.

“After two years, government departments are still searching for the papers, to justify the payment,” Chairman Senate Standing Committee on Finance, Revenue, Economic Affairs and Narcotics Control, Saleem Mandviwalla said here.

The Standing Committee, which met here with Senator Saleem Mandviwala in the chair, expressed serious concern over the affairs of the government, especially of Central Power Purchasing Agency (CPPA), for its contradictory statements in the meetings of standing committee and the sub-committee.

It is pertinent to mention here that after the PML(N) government, after coming into power, had paid Rs 480 billion to the independent power producers (IPPs) to retire the circular debt. However, the Audit department raised some audit objections on this payment, including an Audit Para no 4.2.1 that termed Rs32.451 billion as unjustified payment made for idle capacity of power plants. This audit report was laid before the parliament in 2015 and several meetings of the standing committee and sub-committee were held, which took briefings from the government departments, but nobody justified this payment. When committee asked Chief Executive CPPA Abid Latif Lodhi,: “Whether for idle capacity the money has been paid?”, he replied, “We have paid no money under unutilised capacity.”

Senator Kamil Ali Agha said that since, according to CPPA claim, the money has not been paid, then why at the same time, CPPA is justifying its payment.” “The audit report says that the money has been paid to IPPs for idle capacity,” Kamil Agha added. The senator further asked, “Why was the Auditor General of Pakistan bypassed while making these huge payments in a single day? And, there was no response from the government side.”

Chairman of the committee said that the issue has been discusses several times in standing committee and sub-committee but no satisfactory response was provided by the departments. “We are now giving them two weeks time to sort out the issues, then we will send it to the NAB for further inquiry,” he added.

The committee also asked, “When there was no provisioning of ‘heat rate test’ in power purchase agreement then why payment was made and why it has not been explained so far to the parliamentary body? And, why the government took stay order on it from the court of law?”

Senator Usman Saifullah however contested the committees’ stance saying that the Audit’s allegation is very serious that the IPPs were given undue benefit. He asked the auditor that whether the IPPs made additional profits by virtue of not producing electricity when by generation of power they could have make more profit. The audit officers said: “Yes, through generation they could earn more profit than keeping the plants idle.”

Secretary ministry of Energy (Power Division) Yousaf Naseem Khokhar requested the committee that they may be given two-week time to sort this issue out as it is a very complicated issue. The committee granted them the time. The meeting was attended by Senators Mohsin Aziz, Mohsin Leghari, Ayesha Raza, Murtaza Wahab, Osman Saifullah, Saud Majeed, Kamil ALi Agha, Minister for Energy Awais Lagahri, Secretary Power and other officials.

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