Five independent power producers (IPPs) have earned a whopping profit of over Rs. 40 billion in the last seven years.
This was revealed in a meeting of the sub-committee on Senate Standing Committee on Power with Senator Nauman Wazir Khattak. The parliamentary body has recommended the National Electric Power Regulatory Authority (NEPRA) register criminal cases against the IPPs that provided wrong information about their profits.
The sub-committee has also directed the regulatory authority to conduct the audit of all the IPPs, register criminal cases against those providing wrong information, and confiscate their assets. The authority told the meeting that five IPPs recorded exorbitant gains of Rs. 40.175 billion in the past seven years. It revealed that these power plants earned profit to the tune of 35-40 percent while the allowed return on the investment was 15 percent.
The committee chairman said that Atlas Power registered a profit of Rs. 9 billion, Nishat Power made Rs. 7 million, Attock Gen Ltd. Rs. 11 billion, Nishat Chunian Power Rs. 7 billion, and Liberty Power Rs. 5 billion. Only one power producer reported loss and its return was 12 percent. However, the chairman maintained that IPPs would be given the chance to explain their part.
NEPRA chief told the committee that they had started assessment of the IPP profits, but one producer has obtained a stay order from the Islamabad High Court. He assured the members that the authority would accelerate the efforts to get the stay order vacated and initiate court proceedings on the matter.
He further said that there will be competitive bidding for power plant installation in the future. The sub-committee believes that an overpayment of Rs. 955 billion has been transferred to the IPPs during the last seven years, causing an increase in the circular debt. The committee asked NEPRA to present a comprehensive report on the rising trend in the profits of the IPPs in the next meeting.