Irregularities in power sector caused Rs4tr loss to Pakistan

Sandra Loyd

A query report on the supposed irregularities in the power sector has actually exposed that due to circular financial obligation and aids being provided to independent power manufacturers (IPPs), the national exchequer dealt with a loss of a minimum of Rs4 trillion.

According to the 278- page report, which was prepared by a committee led by former Securities and Exchange Commission of Pakistan (SECP) chairman Muhammad Ali, the cumulative financial assistance for the power sector amounted to Rs3.2 trillion in aids and other liquidity injections from 2007 to2019 In spite of this, there were yearly losses of Rs370 billion due to ‘power sector’ s ineffectiveness’, the report added.

“Power sector policies during the last two decades have allowed exorbitant profits to a select group of investors and encouraged de-industrialisation by incentivising higher capital allocation to a guaranteed and less risky power business,” the report mentioned.


” Throughout this time, ineffectiveness in the public sector generation and circulation business were regrettably endured, consisting of by the federal government and NEPRA[National Electric Power Regulatory Authority] The reform towards the goal of the supreme privatisation of ex-WAPDA [Water and Power Development Authority] circulation business has actually been pending considering that more than 20 years. These business have actually been corporatized with independent boards of directors, yet operationally this whole circulation sector worth Rs1,400 billion is being handled by the federal government,” it added.

The report mentioned that Pakistanis had actually been getting the most pricey electrical energy in the whole area, which might be due to some private business supplying false oil data to safe much better tariffs.

It likewise mentioned in accordance with the power policy of 1994, 15 private power producing business invested around Rs60 billion and made over Rs400 billion and paid 22 times the revenue to their business partners.

“Today, the country’s domestic and international debt levels have reached the point of unsustainability because of which power sector issues require even more urgent redressal. If we do not act soon, we risk economic chaos. Unfortunately, none of the problems have easy solutions. Most require disruptions and losses to certain stakeholders in the short-term if we want to achieve gains in the long-term for all stakeholders. Though it is obvious from this analysis that various mistakes were committed which are part of a natural learning process for policymakers exploring structural changes, it is also obvious that the system and processes were manipulated to the benefit of a select few,” the report mentioned.

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