Pakistan Urges Forensic Audit of Costly IPP Contracts Amid Power Crisis

A Pakistani parliamentary panel has demanded a forensic audit of Independent Power Producers (IPPs) due to high electricity bills and financial inefficiencies, jeopardizing public trust and causing unrest. Lawmakers call for transparency and accountability, scrutinizing past contracts and addressing ongoing protests against unfair IPP agreements.

A parliamentary panel in Pakistan has called for a forensic audit of the Independent Power Producers (IPPs) due to escalating electricity bills. The demand follows concerns that high costs could lead to potential public unrest, The News International reported. The panel noted that citizens are paying billions of rupees annually to IPPs, regardless of their electricity production levels. Lawmakers emphasized the urgent need for reforms to address the financial problems plaguing the power sector and to ensure greater transparency.

IPPs are reportedly draining the country's treasury with an annual payment of PKR Rs 2000 billion in capacity payments, despite non-operational factories, Business Recorder stated. The Senate Standing Committee on Cabinet Secretariat, chaired by Senator Rana Mehmood-ul Hassan, received briefings from energy sector regulators, including the National Electric Power Regulatory Authority (Nepra) and the Oil and Gas Regulatory Authority (OGRA).

The News International reported that a committee member highlighted the need for a forensic audit to uncover irregularities and hold those responsible for inflated agreements accountable. NEPRA Chairman Waseem Mukhtar was questioned about the origins of these expensive contracts and the mistakes that led to the current situation. Another senator, Abdul Qadir, emphasized monitoring the forensic audits to prevent manipulation by the 'IPPs mafia' and warned that the group could resist transparency efforts.

Ongoing massive protests in Rawalpindi, led by Jamaat-e-Islami's Hafiz Naeemur Rehman, are demanding negotiations with IPPs and tax reductions for the middle class. Rehman criticized IPPs for 'looting the masses' while discussions with the government remain stalled. Pakistan's energy sector faces ongoing inefficiencies and mismanagement, with IPP agreements frequently criticized for favoring private producers at the public's expense.

(With inputs from agencies.)