'No sufficient outcome' yet of talks to secure discounts from Chinese power producers: Leghari

ISLAMABAD: Power Minister Awais Leghari said on Sunday that there had been “no sufficient outcome” of talks to secure discounts from Chinese power producers thus far, unlike over Rs3.5 trillion in savings secured through revised agreements with other independent power producers (IPPs) and public sector plants. In March, the government had informed a parliamentary panel that about Rs3.5tr in savings had been secured through revisions to power purchase agreements with 29 private and some state-owned power plants, spanning their three to 20-year terms. The move was aimed at reducing electricity rates. When Leghari was asked about negotiations with IPPs set up under the China-Pakistan Economic Corridor (CPEC) for tariff rationalisation during a press conference on Sunday, he said, “Sufficient outcome has not come out yet.” The minister explained that CPEC-related IPPs were set up under a framework. Under that framework, “we have been trying for concessions in the form of debt-reprofiling, but sufficient results have not materialised yet”. He said a revision of the agreement could only take place while staying within a government-to-government arrangement, as both governments had provided enough guarantees. “We also have to respect investments that flowed in when no investor was ready to look towards Pakistan”, he said, hoping that “an agreement would be reached towards an improvement”. Leghari recalled that renegotiations with IPPs, the restructuring of agreements and the closure of old plants had helped secure Rs3.5tr in savings, and that the last agreements with IPPs would expire in 2053. He also said that a reduction in system losses, transfer of old Genco staff to distribution companies and the use of fiscal space for reduction in circular debt had helped cut the power sector’s budgeted subsidy to Rs890bn this year from Rs1.287tr last year, and it would be further reduced to Rs830bn in the coming fiscal year. In response to a question,...

Original source: Dawn Pakistan