PM Shehbaz optimistic of ‘substantial cut’ in power tariffs in coming months

ISLAMABAD: Prime Minister Shehbaz Sharif has reiterated the government’s commitment to address the challenges faced by the industrial and agricultural sectors due to high powers, ensuring a substantial reduction in energy costs in the coming months. “A competitive industrial sector is essential for economic growth and we are determined to ease the cost of doing business,” the Prime Minister said while addressing a ceremony in Islamabad on Monday. The federal government has been under huge pressure to review its power purchase agreements (PPAs) with independent power producers (IPPs) following an outcry across the country as the addition of capacity-paying charges raised energy bills above the availability of mass in inflation. Last month, the federal cabinet approved “settlement agreements” with eight independent power producers (IPPs) running on bagasse – a move the government says would benefit the national exchequer to the tune of Rs238 billion. These Bagasse based power plants included DW Unit I, Unit II, Ryk Mills, Chiniot Power, Hamza Sugar, Al-Moez Industries, Thal Industries and Chinar Industries. Separately in OCT, the Prime Minister announced the early termination of power purchase agreements (PPAs) with the five oldest IPPs, with annual savings of Rs60bn or around Rs411bn over the remaining term of their contracts. Addressing today’s ceremony, Prime Minister Shehbaz assured the current government’s extensive efforts to ensure ease of doing business and trade for entrepreneurs to revive economic growth. He expressed optimism about the country’s economic recovery and reiterated the government’s commitment to promote progress in various sectors. He highlighted the government’s efforts to stabilize the economy, noting that inflation had fallen below 5% and the bank policy rate was below 13%. He highlighted the growth of exports, especially in the IT sector, and outlined the government’s vision for economic development in agriculture, industry, IT, mining and minerals. The Prime Minister reaffirmed the government’s position in the area of ​​reductions and the right of public entities to reduce government spending. He announced a new initiative to privatize Pakistan International Airlines (PIA) and invited Pakistani investors to participate in a transparent bidding process. “Just as banks were successfully privatized during the 1990s under [then] Prime Minister Nawaz Sharif and are doing well now, PIA will also transform into a world-class airline, just like it did in the 1960s,” he said. He assured the audience that Pakistan is on track to conclude its final IMF programme. The Prime Minister highlighted ongoing efforts to remove barriers to foreign investment and noted that initiatives to improve the ease of doing business would soon be launched. “Pakistan will grow as a great nation through the collective efforts of stakeholders and nation builders,” he added.