Power Sector : Government revisits agreed profitability terms

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In 2021, Rs 550bn out of Rs 1,000bn capacity charges stem from government entities: CPEC Rs 180bn, old-WAPDA Rs 110bn, new-WAPDA Rs 170bn & LNG projects Rs 100bn.

By 2025, these would be Rs 850bn out of a colossal Rs 1,700bn as the nuclear power’s 6.6c charges kick in. These are shockingly high numbers in an stagnating rupee-generating low-income economy.

The government is rightly beginning the discussions on these half-way through the term. Any half-cooked success would be the first real structural reform. These are major challenges to the power sector impacting the industries, common man, fiscal space, employment & national security at large.

Reportedly, WAPDA & GENCOs have shown their willingness to reduce Return on Equity to a Rupee 10% IRR. Whereas, Pakistan Atomic Energy wants decisions discussed at higher levels.

Balance of Payment crises had opened another pandora box. The dollarised agreements are legal but everything has to happen in good faith now. Fix public sector then “urge” the private ones. Charity begins at home.

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