Govt approves a new system for the provision of electricity & a uniform tariff for the SEZs & Industrial Estates
Cabinet approved revised agreements with 14 IPPs, which will result in a deduction of 35 billion rupees from the extra profits of these IPPs over the past years
ISLAMABAD ( WEB NEWS )
The government has approved a new system for the provision of electricity and a uniform tariff for the Special Economic Zones and Industrial Estates to ensure industrial development in the country.
The approval was granted at a meeting of the Cabinet Committee on Energy, which met in Islamabad with Prime Minister Shehbaz Sharif in the chair.
The meeting further allowed single-point power supply to Industrial Estates and Special Industrial Zones and their management to provide self-connection, bill collection and other matters.
Under this system, the interference of officials of the power distribution companies in the special industrial zones and industrial estates has come to an end. In this regard, a specific operations and management mechanism is being evolved as the Power Division and NEPRA will start implementing this mechanism in next three months.
Under the system, the zone developers will not require any additional license to supply power to the industries in the zones.
Speaking on the occasion, the Prime Minister said industrial development is vital for country’s development. He directed to apply the new system to all special economic zones.
The Prime Minister said provision of electricity to industries at a uniform tariff will supplement the pace of industrial development in the country, resulting in more employment opportunities and surge in exports.
Highlighting the benefits of improving the power transmission system, Shehbaz Sharif said industries will play their key role in the further development of country’s economy.
According to the circular debt’ report from July to November last year, it is reported that a decrease was witnessed in the circular debt during the first five months of the current financial year, compared to the previous financial year.
The meeting was informed that there was an increase of 368 billion rupees in the circular debt from July to November 2023, whereas in the first five months of 2024, there was a decrease of 12 billion rupees. The meeting was apprised that there is a total improvement of 380 billion rupees in the circular debt in the ongoing fiscal year as compared to last year.
It was told that with the increase of four percent, the receipts of power sector touched ninety six percent during the first five months of current financial year. Additionally, a decrease of fifty-three billion rupees was witnessed in the losses of electricity distribution companies after bringing improvement in them. Moreover, the overall prices of electricity reduced by four point six four rupees in the current financial year, which became possible after the reforms.
The Prime Minister directed that this new system be implemented across all special industrial zones. He emphasized that industrial development is crucial for the country’s progress, and the government is swiftly fulfilling its commitment to ease doing business. He further noted that supplying electricity at uniform tariffs to industries will accelerate industrial growth, create more jobs, and enhance exports, while improving the transmission system in these zones will contribute to the economy’s development.
The meeting also heard a report from the Power Division on the circular debt from July to November 2024, which highlighted the positive results of the Prime Minister’s energy sector reforms. The briefing revealed that instead of an increase, the circular debt decreased by 12 billion rupees in the first five months of 2024 compared to the same period in the previous year, improving the overall circular debt situation by 380 billion rupees. The report also showed a 4% increase in electricity sector collections, reaching 96%, and a reduction of 53 billion rupees in distribution company losses. Additionally, the average electricity price was reduced by 4.64 rupees per unit, thanks to the reforms.
After the briefing, the Prime Minister spoke to the participants, emphasizing that whenever the opportunity arose, God has guided the country out of darkness. He said the reform process in the electricity sector is progressing rapidly, and its benefits are becoming evident. He also mentioned that efforts are underway to reduce the cost of electricity for consumers, including revising IPP agreements, and praised the Power Division and related agencies for their efforts to reduce circular debt and implement reforms.
The Federal Cabinet has approved revised agreements with 14 Independent Power Producers (IPPs). The meeting, chaired by Prime Minister Shehbaz Sharif, took place on Tuesday, and an official statement was issued. According to the statement, the Cabinet approved revised agreements with 14 IPPs, which will result in a deduction of 35 billion rupees from the extra profits of these IPPs over the past years, and the revision is expected to yield a benefit of 1.4 trillion rupees.
Prime Minister Shehbaz Sharif stated that the revised agreements with the IPPs will help eliminate circular debt. The Cabinet also approved merging the Anti-Narcotics Division with the Ministry of Interior and the Aviation Division with the Ministry of Defence. In his address to the Cabinet, Prime Minister Shehbaz Sharif described the resumption of Pakistan International Airlines (PIA) flights to Europe as a significant achievement and congratulated Defense Minister Khawaja Asif, Federal Minister for Investment, Communications, and Privatization, Abdul Aleem Khan, and the entire Cabinet for their efforts.
Prime Minister Shehbaz Sharif further said that PIA’s flight operations to the United Kingdom would also resume soon. He added that the statement of the Aviation Minister during the PTI era led to economic devastation, but the government’s efforts are now reversing its effects. He also mentioned that the new cross-border point at Panjgur would increase legal trade and curb smuggling, and that conditions in Kurram are returning to normal. He noted that successful operations against the terrorist group Khawarij, under the leadership of the Army Chief, are continuing, and expressed hope that peace akin to 2018 will soon return to Pakistan.