On Tuesday, the federal cabinet approved the Power Division's proposal to revise agreements with 14 Independent Power Producers (IPPs), aiming to lower electricity costs and save Rs 1.4 trillion for the national treasury.
Following discussions with the IPPs, the cabinet endorsed a reduction of Rs 802 billion in profit and cost terms for these companies. Additionally, Rs 35 billion in excess profits from previous years will be deducted from the IPPs.
The cabinet meeting, chaired by Prime Minister Muhammad Shehbaz Sharif, revealed that 10 of these IPPs operate under the 2002 Power Policy, while four are under the 1994 Power Policy. One agreement with an IPP under the 1994 policy has been canceled.
These revisions are expected to save the government Rs 1.4 trillion over the agreements' duration, with annual savings of Rs 137 billion. These savings are anticipated to benefit power consumers.
The Prime Minister praised the achievement, noting that the revised agreements would reduce circular debt, lower electricity prices, and result in significant national savings. He also commended the efforts of the Power Minister, Advisor, Secretary, and Task Force members involved.
In other decisions, the cabinet approved the merger of the Ministry of Narcotics Control into the Ministry of Interior. This integration is projected to save Rs 183.25 million annually in administrative costs. Similarly, the Aviation Division will merge with the Ministry of Defence, saving Rs 145 million annually. The integration of the Aviation Division back into the Ministry of Defence aims to enhance airspace management.
Additionally, the cabinet approved the inclusion of Section 45-A in the Public Procurement Rules, 2004, allowing a procuring agency to delegate the procurement process to another agency. The cabinet also endorsed sending the National Commission for Minorities Act 2024 to Parliament for approval. Finally, the cabinet approved an extension of Dr. Muhammad Bashir’s contract as a Technical Member of the Environmental Tribunal for two more years.
