Islamabad    -   The government is likely to appoint an Inquiry Commission consisting of international firms, Pakistani investigation agencies and local regulators to probe the matter of currency indexation, capacity payments and higher than permissible returns to Independent Power Producers (IPPs). While briefing the sub-committee of the senate standing committee on power an official of National Electric Power Regulatory Authority (Nepra) disclosed that the IPPs’ advisory council had proposed the establishment of an inquiry commission and the same is endorsed by the Nepra. The subcommittee met with Senator Nauman Wazir Khattak which discussed and reviewed the issues pertaining to high tariff, capacity of charges, heat rates, and calculation of payback periods of IPPs.

Member tariff of Nepra, Saifullah Chattah further said that the proposed Inquiry Commission would comprise international engineering, legal and financial firms, experts from Nepra, ministries of finance and energy, National Accountability Bureau (Nab), Securities & Exchange Commission of Pakistan (SECP) and other stakeholders. The government was examining its pros and cons of the proposal so that it has minimum negative impact, he added. Senator Nauman Wazir said the panel would not recommend any changes in the contract but some issues certainly required to be probed, if their initial statements to get tariffs were not different from their performance. The committee observed that the restraining order of the court does not bar Parliamentary Committees to look the matter up.

The committee was told that Nepra had responded to 11 out of the 17 questions asked from it and need 3-4 days more to conduct the analysis of remaining questions and observations. The Committee strongly recommended that respective members of Nepra from provinces should have expertise of one or more departments of the regulatory authority and observed that the committee will consider suggesting a number of recommendations regarding the qualifications and eligibility criteria of the people appointed in Nepra. The Committee was also briefed on Power policy 1994, power purchase agreements backed by sovereign guarantee, and the international rate of return of 13 percent given to IPPs. Responding a query raised by the Committee, Nepra clarified that 13 percent was given by the government to IPPs on shareholders equity. Due to a number of concerns and apprehensions raised on the policy, it was revised as Policy for Power Generation Projects Year 2002 and later it was decided to index foreign O&M cost with US CPI after an ECC decision because the foreign investors stayed away and hence the return on equity had to be increased to 15pc.