Power tariff hike owes to improper policies of previous regimes: Omar Ayub

ISLAMABAD – The government Monday told the Senate that it was forced to increase electricity tariff due to the wrong policies of last successive government of PPP and PML-N, which promoted costly and imported resources of power generation.

Winding up the debate on a motion of increasing circular power debt of the country, Federal Minister for Power Omar Ayub Khan told the house that there was a policy shift of the government on the resources of power generation and the government was depending on local resources to bring the tariff rate down. “The government was focused on renewable energy including solar and wind besides other local resources of power generation like hydel and coal,” the minister said. He said that country’s 70 percent out of the total energy mix depended on imported energy (fuels) today due to the wrong policies of previous government of Pakistan People’s Party (PPP) and Pakistan Muslim League-Nawaz (PML-N).

“PTI government for the first time has introduced alternate renewable energy plan,” Khan said adding that Balochistan and Sindh would benefit maximum from that plan. He said that the government wanted that renewable energy should have 20 percent share of the total energy mix by 2025 and 30 percent by 2030. “Our target is to get cheap electricity by using artificial intelligence system and we want to increase the power generation capacity of country by 100,000 megawatt (MW) by 2047, out of which 80 percent of power generation would be form local resources,” the minister said.

He said that last PML-N government scrapped 4,000 MW renewable energy projects in 2016-17 and promoted costly LNG-based power plants. Even 25-year long contracts were made, where pay back of principal amount along with interest was in only 10 years, he said adding that PML-N signed such controversial contracts.

He said that other issue the government confronted with was the old transmission line system as the PML-N  government did not upgrade this system. “Up till 2018, the country had only transmission capacity of 18,000 MW, which now has been increased to 2m5000 MW,” he said.

The power minister told the house that PTI government had to increase the electricity tariff soon after coming into power because it was the PML-N government that artificially delayed its increase for one and half year to get political mileage in 2018 general elections. Even then, Rs 1. 29 per unit increase was passed on to the consumers contrary to Rs 3.29 that was due, he said adding that no rate was increased for the consumers consuming up to 300 units.

He said that an amount of Rs39 billion of circular debt was piling up monthly during PML-N regime that was brought down to Rs 12 billion per month by the PTI government before outbreak of COVID-19. “Another amount of Rs 272 billion might have piled up if it kept on increasing with the rate of Rs 39 billion per month,” he said. He said that 50 percent of the total circular debt was due to unfunded subsidies given by the last regime and 35 percent increase in it was due to devaluation of rupee against dollar.

The minister denied that there was any conflict of interest involved in the dealings of the government pertaining to power generation. He said that a committee was negotiating with independent power producers (IPPs) and hopefully there would be a better outcome of this exercise.

On the issue of K-Electric and unannounced load-shedding in Karachi, the power minister said that the government was ready to increase its supply of electricity to the private company but latter’s system lacked capacity to get this electricity. The K-Electric, the private power company, neither made a planning nor did invest to upgrade its system, he said.

He assured the house the government would provide electricity to K-Electric from national grid to fulfill its demand. 

Earlier, Jamaat-e-Islami Senator Mushtaq Ahmed speaking on his motion said that on one side, the government was increasing power tariff, while on the other hand, the circular debt was on the rise. He claimed that Rs 45 billion per month of circular debt was piling up during last PPP  government, which was brought down to Rs 10 billion per month by the PML-N government while it was again piling up to Rs 41 billion per month during the incumbent regime.