Govt ending contracts with 5 IPPs: PM –Will save consumers Rs60bn a year

With a promise of assistance for those affected by inflation, Prime Minister Shehbaz Sharif announced on Thursday that the federal government will be ending its agreement with five independent power producers (IPPs) in the first phase.
These five IPPs put the interests of the country ahead of their own by freely deciding to end their contracts with the government. The prime minister told the Cabinet, “For them, the take-and-pay model is no longer in place.
The inclusion of capacity payment charges to power bills has caused national outcry and put the federal government under extreme pressure to reevaluate its agreements with the IPPs, pushing the power bills beyond the reach of the impoverished people.

The prime minister told the cabinet that tariffs will be lowered by gradually amending contracts with other independent power producers (IPPs) in the electricity industry. The measure would also save the national exchequer Rs. 411 billion, freeing up additional funds for the government, which is already stressed for cash.
“The rate of inflation was more than 30% [in the same month last year], it now stands at 6.9%,” stated Prime Minister Shehbaz.
The five independent power producers (IPPs) were praised by the prime minister, who said they were the first to contribute to the public’s relief effort.
A member of the task force on the power industry stated that all five IPPs will sign the documents terminating their contracts if the arrangements were agreed.