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00:00The biggest problem is that when it was negotiated, the biggest criticism was that you knew that
00:05in the coming years, the price will increase, the dollar will not always be stable, we know
00:10about our economy, the dollar will go up and down and eventually this capacity payment
00:14will be so painful that it will be a burden on the public, which has now come.
00:17This was one of the expectations, this was one of its forecasts and that time has come now.
00:22The first thing is that it was not negotiated.
00:25There is no negotiated contract.
00:27The government of Pakistan has made a document called the Power Purchase Agreement.
00:31All these things are written in it.
00:33The government of Pakistan has made it.
00:35You cannot even change a word in it.
00:37Then you gave a sovereign guarantee.
00:39It is called the Implementation Agreement.
00:41The government of Pakistan, as a sovereign, gave the guarantee that we will make the payment.
00:46You made the tariff.
00:48The government of Pakistan, initially the government of Pakistan, PPIB, later NEPRA came
00:52and made the tariff that we will make this much payment for you, this much payment for
00:57capacity, this will be the mechanism and this is the fuel payment.
01:00There is no negotiation in it.
01:02So the mistake that you have made, the investment in Pakistan, if the investment comes,
01:09this was the method, they thought that the investment will come in the same way.
01:13After the first few plants, you should not have given the tariff upfront.
01:19What was the reason for that?
01:20Because clearly there is some problem due to which there is dysfunction.
01:23The reason for that was that they did not understand.
01:25The stupidity of our government is due to this.
01:28You should have taken the tariff from the bid.
01:30Initially you attracted people, the investment came.
01:32You had 18% return.
01:35You determined the price of 18% electricity plants.
01:39The price of electricity plants is $1 million per megawatt.
01:44This happened when the government set its tariff, which was around 2015.
01:50Their tariff was set by NEPRA at $1.1 billion per megawatt, which was the capital cost.
01:55That is, the electricity plant will be set in this much.
01:57When it was set, it was set at 750,000.
02:00So the tariff, which was about 85%, came down by 40%.
02:04These were 5000 megawatt plants.
02:08With this, the upfront tariff set by NEPRA in CPEC is about 4000 megawatts.
02:16Their capacity payment is about 375,000.
02:22Their capacity payment is about 250,000.
02:26This is 5000 megawatts and that is 4000 megawatts.
02:29This proves that there was no transparency.
02:32There was no transparency.
02:33There were interest groups due to which a certain sector…
02:35No, no, no, I am sorry.
02:36Then why did you not do fair bidding?
02:38Fair bidding is a mistake.
02:40It is a mistake.
02:41But, sir, such a sudden mistake does not happen out of ignorance.
02:44Everyone knows what will be the consequence of this mistake.
02:47Estimations are made, reports are made.
02:48It is not a matter of consequence.
02:49Someone is benefiting.
02:50Who is benefiting?
02:51No one is benefiting.
02:52You gave a tariff.
02:53Some people invested.
02:55Some did not.
02:56You see, we also gave a tariff of 28 cents for wind in Pakistan.
03:0228 cents.
03:04Today, it is about 80 to 90 rupees per unit.
03:08No one came for that.
03:10There was no place in Pakistan to invest.
03:12We gave 23 cents, 18 cents, 15 cents.
03:15We gave 11, 12 cents.
03:16You are lucky that they did not come for that high tariff.
03:19So, point, if I ask a simple question,
03:21were the IPP agreements, especially from 2015 onwards,
03:24the best negotiated rates,
03:27the best possibilities at that time,
03:30or were there any other options
03:32that could have been availed?
03:34I am saying this in hindsight.
03:35They were not negotiated.
03:36Sir, when they were being negotiated,
03:39at that time, everything was being decided.
03:41There was some rule of the game.
03:43No one was negotiated.
03:44The government made the policy.
03:45The policy was made in 1993.
03:47The government made it.
03:49They then floated that policy in the market.
03:51Whoever came to invest, they invested.
03:53Big companies from all over the world came.
03:55Because there was not enough capital in Pakistan to invest.
03:58People came from outside.
03:59They invested.
04:00And they are rising.
04:01It gave you electricity.
04:03So, your mistake,
04:05I consider it inappropriate,
04:07is that after the first few plants,
04:10through bid, you make the tariff,
04:12you make the price discovery,
04:13you make the bid.
04:14In 2017, when I was the Prime Minister,
04:17Mr. Mirtha S. Mahir was the Finance Minister,
04:19we changed it.
04:20We made a cabinet decision
04:22that after this, all the plants
04:24will start with a bid.
04:26The PTI government came and reversed it.
04:28That NEPRA will now give a front tariff.
04:30NEPRA does not have the capacity
04:32to determine a front tariff.
04:34It has been established.
04:36When the government put up its own plants,
04:38their cost was 1.1 million dollars per megawatt.
04:44The government put it up.
04:46Look at the nature of transparency.
04:48The government put up four plants
04:50for 7.5 lakhs.
04:52That is, the cost was 40% less
04:54than what NEPRA had determined.
04:56This is the stupidity of NEPRA.
04:58When you do not have the capacity
05:00for price determination,
05:02how can you get the bid price?
05:04They did not do it.
05:06It is also the fault of the rules.
05:08If you give the authority to the director
05:10and you do not correct the systems,
05:12then it is the stupidity of the government.
05:14If we tell people in an easy way,
05:16how long will we have to pay
05:18for capacity payments?
05:20Will we get the same bill in a year or two?
05:22Is there a way to reduce the bill?
05:24If we have to reduce the bill,
05:26then these are the avenues
05:28through which the bill can be reduced.
05:30We have to understand one more thing
05:32about capacity payments.
05:34We call it a levelized tariff.
05:36When we tell you how it is,
05:38we call it a levelized tariff.
05:40A levelized tariff is the average cost
05:42of a plant in its lifetime.
05:44Actually, when a plant is put up,
05:46its tariff is very high
05:48for the first 7 to 10 years.
05:50Because you have to bear
05:52financial costs in it.
05:54There are bank repayments.
05:56If you have a levelized tariff
05:58of 7 cents,
06:00then actually,
06:02in the first 7 to 10 years,
06:04you will be giving it 10 to 11 cents.
06:06So, its charges are higher.
06:08So, whatever new plants are put up,
06:10like new plants of Thar,
06:12these three Chinese are new,
06:14your solar wind is also often new,
06:16your RNG is also new,
06:18your nuclear is also very new,
06:20after some time,
06:22their prices will decrease.
06:24Tell us the timeline.
06:26People want to know
06:28how much their bills will be
06:30in the next year.
06:32There will be a slight difference
06:34in your capacity payment.
06:36But I will say that
06:38after 5 years,
06:40it will be much less.
06:42But I will also say that
06:44if your dollar goes to 350,
06:46then you will see a higher bill.
06:48So, when the dollar will be expensive,
06:50then we will be buying electricity
06:52in rupees.
06:54What options does the government
06:56have?
06:58The government has options
07:00to give clarity to the people
07:02about the issues.
07:04There are all kinds of vested interests
07:06that want to show each other down.
07:08I told you that
07:10out of 18,
07:12Rs. 12 or Rs. 11.5
07:14is the government's own plant.
07:16After that,
07:18you have to find a way
07:20what you will have to do.
07:22Then you have to pay
07:24tax on fuel.
07:26RLG is 18% tax.
07:28So, the electricity
07:30price will go up, not down.
07:32You have to
07:34fix the economy.
07:36If our dollar
07:38was at Rs. 100 today,
07:40you can calculate it yourself.
07:42If our dollar was at Rs. 150 today,
07:44you will be happy
07:46if I deduct half of your bill.
07:48If I had kept the dollar at Rs. 150,
07:50this would have happened.
07:52When your economy weakens,
07:54your bill will increase.
07:56Until the political stability
07:58is not there,
08:00the economy will not be strong.
08:02Your bill
08:04is also related
08:06to the political instability
08:08of the country.
08:10It is related to the election theft.