ISLAMABAD (Kashmir English): The Power Task Force has been doing a wonderful job as it introduced multiple reforms including termination of costly plants, and IPP renegotiations.
The body has been under criticism by some circles for some time but without knowing the facts. It is unfair to undermine the remarkable performance of the Power Task Force.
A glimpse of its achievements include: Seven expensive power plants (including 6 x furnace-oil plants) with almost zero off-take but 100% capacity payments were terminated, substantially reducing future capacity burden.
It renegotiated IPP tariffs with 54 IPPs (conversion from ‘Take or Pay’ to ‘Hybrid Take & Pay’ model) and secured approximately Rs 4 trillion lifetime savings.
The Power Task Force concluded 12 thermal IPP arbitration settlements and saved / recovered over Rs 31bn.
Defunct government generation units were sold in record time, generating Rs 48 billion. Concurrently, 3,600 idle employees were readjusted to meet DISCOs’ staff shortages, reducing idle manpower cost and loss-related burden.
Circular debt stood at Rs 2,410 billion on 30 Jun 2024. The existing Rs 3.23/unit DSS, earlier used only to service interest, was secured to raise Rs 1,225 billion concessional financing at record rate of KIBOR -1% (instead of earlier costly financing rate of KIBOR +4.5%).
The amount was paid to IPPs at once while seeking waiver of Rs 418 late payment interest. As circular debt was practically cleared, the bank loan will be paid over the next 4 years through same DSS (Rs 3.23/ unit).
The Force also helped cut delayed payment surcharge from KIBOR +2.5% to only 1%, slowing future circular debt buildup.
Overall, multiple reforms including termination of costly plants, IPP renegotiations, sale of government power plants and waiver of late payment interest generated estimated savings of nearly Rs 11 trillion, which had to be paid by consumers in future.
It was not just rhetoric but hard negotiation, consistent and sincere efforts and structural correction by the Power Task Force that led to reforms.
