SC summons power minister over excessive payments to IPPs


ISLAMABAD: The Supreme Court (SC) on Wednesday summoned Federal Minister for Power Omar Ayub Khan to explain his position over excessive payments made to independent power producers (IPPs), hinting it might send the case to the accountability watchdog.

A three-judge bench, headed by Chief Justice of Pakistan (CJP) Mian Saqib Nisar, was hearing a suo motu case pertaining to the excessive amount paid to IPPs by the government.

At the outset of the hearing, Justice Ijazul Ahsan, a member of the bench, quoted a report as saying that IPPs were paid Rs159 million each and questioned if the power producers were paid as per their power generation capacity.

The secretary power division, who was present in the court, explained that the IPPs were paid as per their capacity and fuel consumption.

“They are paid as per their capacity regardless of whether they generate electricity or not.”

“Millions of rupees were paid to IPPs even if they produced electricity or not,” Justice Nisar remarked.

“Such agreements are being revoked the world over,” he added.

“People didn’t get electricity but private companies were made full payments. Nothing was obtained by paying billions of rupees to private companies,” he continued.

“We are sending this matter to the National Accountability Bureau (NAB),” the top judge added.

“The government faced a shortfall of electricity, did you not supply it?” Justice Faisal Arab inquired.

“National Power Construction Corporation (NPCC) determines the demand and when it tells, IPPs produce electricity,” the power company’s counsel answered.

“Agreements with IPPs have become a noose around our necks. We don’t know who those people were who made these agreements. Whether electricity was provided or not, money was given. These people were darlings,” CJP Nisar observed.

“The circular debt rose to millions and billions. Neither people nor industries got electricity but IPPs kept getting money,” he added.

“I need to understand this case. You must have made a presentation which you keep showing to the prime minister,” the CJP said to the power secretary.

Federal Minister for Power Omar Ayub Khan was then summoned by the top court.

Last week, the top judge took a suo moto notice over excessive payments made to IPPs in connection with circular debt.

The chief justice took the notice while hearing different cases at the Supreme Court Lahore Registry and issued notices to 10 IPPs.

The IPPs, which are approximately 50 per cent of the power producers within the industry, have the verified and audited overdue amount to approximately Rs248 billion as of July 15, 2018, in respect of 21 members of the Independent Power Producers Association (IPPA).