Govt to cut power tariff for revival of economy

ISLAMABAD: Ahead of the final review next month with the International Monetary Fund (IMF) of the ongoing $3 billion Stand-By Arrangement, the Power Division on Tuesday confirmed to have finalised a plan to reduce power tariffs for the industrial sector to revive economic activities, create job opportunities and address circular debt challenge.

Testifying before the Senate Standing Committee on Power, Secretary-In-Charge Power Division Asad Rehman Gilani said working had been completed on bringing down the industrial tariff to 9 cents per unit which currently stands at 14 cents. He told the panel that a review of industrial tariffs was important to run the industry, adding that this would help job creation and address circular debt among various entities.

The meeting of the committee led by PMLN Senator Azam Nazeer Tarar decided to have a detailed session on circular debt that had gone beyond Rs2.7 trillion in the power sector. It asked the secretary finance to brief the panel in its next meeting to be scheduled in consultation with the Ministry of Finance. The power tariff was increased last year for the industrial sector from nine cents per unit to about 12.5 cents at the time to secure IMF.

The committee also ordered a fresh probe into allegations of malpractices and irregularities in the award of contracts in major foreign-funded projects, particularly those financed by the World Bank and the Asian Development Bank that had stirred controversies leading to the initiating of independent investigations by the multilaterals.

Decision taken ahead of final IMF review under current $3bn SBA

The committee asked the Power Division to “form an internal inquiry committee headed by the secretary Power Division to address issues related to pending projects, specifically the construction of a 765kV double circuit transmission line from Dasu Hydro Power Station to Islamabad and ADB-funded project ACSR Bunting Conductor LoT-II A”.

Mr Tarar advised the secretary Power Division to review previous reports and the tendering process in the award of contracts in both projects and submit a comprehensive report within three weeks to the Senate panel.

The committee had earlier planned to hold an in-camera meeting on the two contracts but then decided to take up the matter again once the Power Minister Muhammad Ali returned from abroad and the fresh probe report was submitted by the secretary power-led committee.

Moreover, the committee members also discussed a complaint regarding the long-delayed restoration of electricity in the Mirani Dam Feeder, Dasht, District Kech.