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Good News | Govt ends contracts with five IPPs | Energy Minister Awais Leghari's Give Breaking News
#waseembadami #11thhour
Good News | Govt ends contracts with five IPPs | Energy Minister Awais Leghari's Give Breaking News
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NewsTranscript
00:00It is a news related to the common man. You may remember.
00:02A few months ago, there was a sudden discussion about IPPs.
00:05You all know that people get so much expensive electricity.
00:09Electricity is more important than rent and house rent.
00:13So, we have made agreements with IPPs that they have to pay capacity charges.
00:21That is, we have made agreements with them that even if they do not produce electricity,
00:27they have to pay the charges.
00:29That is why we have made agreements.
00:31There were demonstrations and protests. All the parties spoke up.
00:33The government said that we are already working on this.
00:36And we will give you good news.
00:37It seems that some good news has come.
00:40Obviously, it seems so.
00:41We have all the reasons to believe that a good news has come.
00:43A good start has been made.
00:44The government has made agreements with two, not three, not four, not five IPPs
00:48that they have to pay so much money.
00:50They have to pay Rs. 411 billion.
00:52We will not have to pay that.
00:53And this benefit will be transferred to the public.
00:56And agreements with more IPPs will either be terminated or renegotiated.
01:00And in this way, more or less people will have a shortage of at least Rs. 10 per unit of electricity
01:06for the public in the times to come.
01:09We talk to the relevant minister, the competent minister, Mr. Amit Laghari.
01:14We try to understand in simple words that will there really be a shortage of electricity for the public?
01:18If there will be, when will it be?
01:19How many IPPs have been terminated?
01:22Are those IPPs from Pakistan or from abroad?
01:24Are those IPPs from the government of Pakistan or not?
01:27These are some basic things that we try to understand in simple words.
01:32We have with us the competent minister, Mr. Avis Laghari.
01:37Mr. Avis, Assalam-o-Alaikum.
01:38Assalam-o-Alaikum, Sir.
01:40Sir, thank you very much for your time.
01:42And it is good that these efforts are coming forward.
01:45We do bad work where it is necessary.
01:50Within the limits of decency, of course.
01:52But if it seems appropriate and good work is being done, then it should be appreciated.
01:55Please explain a few things to us in a common sense.
01:58First, you said that this will save Rs. 411 billion annually,
02:03while the public will benefit from Rs. 60 billion.
02:06What does this mean?
02:07That all the profits that will be saved will not be transferred to the public.
02:10What will happen?
02:12Mr. Wasim, thank you for inviting me to your show today.
02:16After a very careful analysis, our government had decided
02:22that in the next few months, we will take such steps
02:28that will reduce the cost of electricity by about Rs. 8 to Rs. 10 per unit.
02:36Right.
02:37There are about six to seven different steps.
02:41At different times, as they are realized in the groups,
02:46we will continue to benefit the public.
02:49The first step from that was the selection of those plants
02:53that we no longer need in the system.
02:56There were five plants.
02:58We had to make a capacity payment of Rs. 411 billion in the next few years.
03:05Whether we take electricity from them or not,
03:08we did not feel the need to take electricity from them.
03:12We made a capacity payment of Rs. 411 billion with them
03:19and said that you can retire your plants from now on.
03:23With their help, they agreed to this with mutual agreement.
03:29We had to pay them a total of Rs. 411 billion.
03:34We will save about Rs. 70 billion per year.
03:40That Rs. 70 billion per year will be the translate of Rs. 70 paise per unit,
03:48which will give our consumers an advantage.
03:51And they will get it forever.
03:53That is, the Rs. 70 billion per year that we had to pay,
03:57will be exhausted from the system.
03:59Because of this, the consumer will get an advantage.
04:03So, the Rs. 411 billion that we had to pay,
04:06will be transferred to the public on the 21st.
04:12Yes, we had to pay Rs. 411 billion to different plants
04:17at different times in the near future and medium term future,
04:22which we do not have to pay now.
04:24Sir, these plants were generating about 2,400 megawatts of electricity.
04:29So, there will be no deficit.
04:31We had more electricity than we needed.
04:33Now, if these 2,400 megawatts do not come,
04:35then there will be no difference.
04:37We will take it from Rs. 9. Is that right?
04:39Yes, these were the most expensive plants,
04:42which never came above dispatch,
04:44because their energy price was expensive.
04:47And the surplus plants that we have,
04:50I have already told you in my statements,
04:53that just to save 86 hours of load-shedding throughout the year,
05:05you have installed about 3,500 megawatt plants.
05:09Out of these, there were 2,400 megawatts,
05:13which had about four plants of furnace oil,
05:16and one plant of RLNG, Raush.
05:19These plants will be out of our system now.
05:22Sir, is it possible that
05:24people can get immediate relief,
05:26which they can see in their next month's electricity bill?
05:30Or, like you said,
05:32Rs. 10 per unit will ultimately be beneficial.
05:35So, how long should people expect this estimate?
05:39As our agreements materialize,
05:44in the next month,
05:46we will make these agreements effective from 1st October, retrospectively.
05:54This is the job of the regulator.
05:57It won't take too long.
06:00The benefit of this will come under your next QTA,
06:05and there will be a reduction in capacity payments.
06:08Okay.
06:10None of these plants were imported.
06:13They were all Pakistani.
06:15When there was a lot of debate on IPPs,
06:17it was said that the government should stop
06:20the government-owned plants first.
06:23So, please tell us,
06:24how many of these 5 were under the government's control?
06:28None of these 5 were owned by the government.
06:32None of the government's plants can be shut down.
06:37They have more utility.
06:39They are new plants.
06:41Their electricity is more efficient.
06:44Along with the government's plants,
06:47the return on equity that is given to them,
06:51their profit,
06:53we are talking about reducing that.
06:57This will save you around Rs. 150 billion annually.
07:02And that, God willing,
07:04we are increasing each category.
07:09First, we did 5 plants.
07:11Now, we will do the government.
07:13We will do the others as well.
07:15Then, there will be tree profiling.
07:17Then, there will be take-and-pay.
07:20Take-and-pay plants.
07:22So, all these things.
07:24That is why we have an idea
07:26that in the next few months,
07:29we will realize our people and give them, God willing.
07:34Which you said should be expected to be around Rs. 10 per unit.
07:38God willing.
07:41You are saying that the government's plants cannot be shut down.
07:44They will not be shut down.
07:45But will the government's plants be given capacity payments?
07:50The government's plants will be given capacity payments
07:53only to the extent that
07:55their loan repayment,
07:58financial cost of the loan,
08:00and O&M should be met.
08:03The return on equity,
08:06the part of the capacity payment,
08:08is the only medium
08:10in which we can reduce the government's money.
08:14And it should have an impact of around Rs. 150 billion.
08:19Right now, our negotiations with all of them,
08:22in which VAPTA,
08:25LNG plants, nuclear plants,
08:27GUTU, Nandipur,
08:29and all these plants are included,
08:31our negotiations have begun.
08:33Towards the end, sir,
08:35We are talking about Pakistani plants,
08:37government plants,
08:38the foreign plants,
08:39there are Chinese plants as well.
08:41And the unfortunate incident that took place at Karachi airport,
08:44the target was set.
08:46We came to know that we had to talk to them about IPPs.
08:49We had to talk to them on this model.
08:51Obviously, that process took a while.
08:53To what extent did it take?
08:54When will this process start again?
08:59We have around 10 plants,
09:0210 projects,
09:04which are funded by CPEC,
09:06and have Chinese lending in them.
09:09Negotiations with all of them had begun.
09:14It was in a very advanced stage.
09:16The finance minister himself is leading it.
09:19I am assisting him in the exercise of debt re-profiling.
09:23We understood,
09:25we understood until a few days ago,
09:28that this is a matter of one or two weeks,
09:31when one of them,
09:33a very big number,
09:35had come to the position of signing the MOU.
09:39But unfortunately,
09:41this incident at Karachi,
09:43these are the Chinese targeted incidents of terrorism.
09:50That is why we say,
09:52their aim is to destabilize the economy of Pakistan.
09:57This is a part of a well-thought-out plan.
10:01Because of this,
10:03unfortunately,
10:05the process of MOUs will be delayed.
10:07But we hope that
10:09we will conclude this soon,
10:11Inshallah.