More than Rs100bn in losses incurred annually, power sector probe finds

An inquiry committee probing losses in the power sector provided a report to Prime Minister Imran Khan on Saturday in which it notified more than Rs100 billion in losses incurred by the national exchequer annually.

A 278-page report, the first of its kind, was prepared by a nine-member committee tasked with unearthing the reasons behind the huge losses accumulated in the power sector over the years.

The report has been submitted at a time when the country is already in an uproar over findings by committees which investigated the sugar and wheat shortages faced by the country in the past few months.

The committee, in its findings, declared agreements made with the power plants  "unfair".

Losses to the national exchequer were attributed to misappropriation in tariff and fuel consumption rates, as well as a guaranteed profit in dollar exchange rates.

The official report also indicated that Independent Power Producers (IPP) owners have received Rs350bn illegally after 1994.

According to the committee's findings, instead of earning a profit of 15%, power plants were involved in raking in a 50-70% profit annually.

The report further said that each power plant's cost was marked up between Rs2bn and Rs15bn and NEPRA was then charged heavy tariffs.

Coal power plants alone were declared at Rs30bn above their real valuation, said the report.

The report recommended that a "take-or-pay" formula used with IPP owners for capacity payments be done away with. It has also recommended that a recovery plan for Rs100bn be made immediately, say sources.

The country is already engaged in a ugar crisis where sources say that the sale and purchase of sugar to the benefit of sugar barons across the country was carried out under benami businesses.

National Accountability Bureau is already investigating a number of cases related to benami accounts, assets and transactions.