Power sector capacity payments to become a crisis soon: Mian Zahid Hussain

Chairman of National Business Group of FPCCI, President Pakistan Businessmen and Intellectuals Forum, and All Karachi Industrial Alliance, and former provincial minister Mian Zahid Hussain on Wednesday said costly electricity is resulting in low demand which is hitting masses and all the sectors of the economy.

Power producers are getting billions of rupees in the capacity payments as per the agreements resulting in frequent tariff hikes which is transforming in a crisis of payments, he said.

Mian Zahid Hussain said that government can cope with the issue capacity payments by reducing the tariff to boost demand, promoting industrial sector which will consume electricity, provide jobs and increase revenue and export the surplus power.

Talking to the business community, the veteran business leader said that many power plants are under completion despite reduced power demand which will increase capacity payments to Rs 1.4 billion by 2022-23.

Many power plants are scheduled to come online by 2025 pushing up production which can be tackled by reduced tariff and export of electricity to Afghanistan.

Afghanistan is buying electricity from all the neighbours except Pakistan while the tariff of electricity in Iran, Uzbekistan, Tajikistan, and Turkmenistan are very low as compared to Pakistan.

Afghanistan will only pay if the tariff is kept comparable which will reduce losses as power demand is reduced by 65 percent in winter in Pakistan while the demand is increased by up to 180 percent in Afghanistan in winter which can be used to reduce losses.

He said that government should also invite private sector to invest in electricity exports.

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