Karachi: Mr. Abdul Mohamin Khan, Acting President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), announced that the organization will present its concerns regarding the unsustainable capacity charges of Independent Power Producers (IPPs) to the Supreme Court of Pakistan (SCP) and the Special Investment Facilitation Council (SIFC). This action is described as a critical measure to protect Pakistan's economy and its citizens.

According to Federation of Pakistan Chambers of Commerce and Industry, the FPCCI has not been included in the consultative process to address the issues with IPPs' capacity charges, despite repeatedly voicing its concerns. As the primary stakeholders, the exclusion of the business community is a significant oversight.

Mr. Khan also outlined a charter of demands for the power sector during his announcement. These demands include a forensic audit of IPPs, the abolition of capacity charges whereby only generated electricity would be paid for, and the renegotiation of power purchase agreements with IPPs to ensure fairness and transparency.

The Acting President of FPCCI further stated that Pakistan had paid approximately PKR 2,000 billion in capacity charges in FY24, with projections indicating a rise to PKR 2,700 – 2,800 billion in FY25. He emphasized the financial strain this places on the government and public due to agreements indexed to the US dollar, which escalate IPP returns as the Pakistani rupee depreciates.

Furthermore, Mr. Khan called for a comprehensive review of the IPP agreements, including price re-evaluations within legal constraints and enhanced oversight to prevent potential over-invoicing. He highlighted the necessity of examining the energy infrastructure for clauses related to misinformation and fraud. To ensure electricity is affordably priced for industry and supports national interests, a strategic approach to managing IPP relations is crucial, he proposed.