KARACHI: Johar Qandhari, President of the Korangi Association of Trade and Industry (KATI), has
demanded the cancellation of contracts with Independent Power Producers (IPPs), citing significant
economic harm. Qandhari highlighted that the government’s agreements with IPPs, which guarantee
payments in dollars, are severely damaging the economy.
“The government is buying electricity from these IPPs in dollars and selling it in rupees,” Qandhari
stated, “with their profits soaring due to the rupee’s devaluation.” He pointed out that last financial
year, the government paid 1,800 billion rupees to these IPPs, with over 2,100 billion rupees due this
financial year.
Qandhari criticized the contracts, noting that some IPPs have not generated any electricity yet receive
billions in payments, which he described as a burden on the public exchequer and an oppression of the
poor. He also raised concerns about capacity charges imposed on people for unused electricity, calling
such agreements unprecedented worldwide.
He urged the government to cancel all existing contracts with IPPs and negotiate new ones, stipulating
payments in local currency based solely on the amount of electricity purchased. Qandhari emphasized
that the current terms, leading to electricity rates exceeding 55 rupees per unit, have caused an
economic crisis, inflated production costs, and hindered the competitiveness of Pakistani products in the
global market.
Qandhari has appealed to the Prime Minister and the Federal Minister of Energy to urgently address this
issue to avert further economic instability.
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