KATI President urges government for cancellation of IPP contracts to prevent economic paralysis

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Johar Qandhari, President of the Korangi Association of Trade and Industry (KATI), has demanded the cancellation of contracts with Independent Power Producers (IPPs), citing significant economic harm. Qandhari highlighted that the government’s agreements with IPPs, which guarantee payments in dollars, severely damage the economy.

“The government is buying electricity from these IPPs in dollars and selling it in rupees,” Qandhari stated, “with their profits soaring due to the rupee’s devaluation.” He pointed out that last financial year, the government paid 1,800 billion rupees to these IPPs, with over 2,100 billion rupees due this financial year.

Qandhari criticized the contracts, noting that some IPPs have not generated any electricity yet receive billions in payments. He described this as a significant burden on the public purse and an oppression of people experiencing poverty. He also raised concerns about capacity charges imposed on people for unused electricity, calling such agreements unprecedented worldwide.

He urged the government to cancel all existing contracts with IPPs and negotiate new ones, stipulating payments in local currency based solely on the amount of electricity purchased. Qandhari emphasised that the current terms, leading to electricity rates exceeding 55 rupees per unit, have caused an economic crisis, inflated production costs, and severely hindered the competitiveness of Pakistani products in the global market, potentially leading to significant loss.

Qandhari has appealed to the Prime Minister and the Federal Minister of Energy to address this issue and urgently avert further economic instability.


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