Headed by former Chairman SECP, Muhammad Ali, a close relative of Minister for Energy Omar Ayub, the committee will comprise Additional Secretary, Power Division- Member, a nominee of National Electric Power Regulatory Authority (Nepra)- Member, a nominee of Central Power Purchasing Agency-Guaranteed (CPPA-G)-Member, a nominee of National Power Control Centre(NPCC)-Member, a nominee of Federal Investigation Agency (FIA)-Member, a nominee of Securities and Exchanges Commission of Pakistan (SECP)-Member, a nominee of ISI-member, and officer not below the rank of Deputy Secretary, Power Division as Secretary to the Committee.
This committee is the fifth forum where private power generation companies known as IPPs will be grilled. Their cases were already being heard in the Supreme Court, National Accountability Bureau (NAB), National Electric Power Regulatory Authority(Nepra), and Debt Inquiry Commission headed by Hussain Asghar.
The committee, in performance of its duties, may: (i) co-opt any expert from government as well as private sector; (ii) engage to seek information and assistance from technical testing firms, Advisors, bankers, CA audit firm (A-rated category), legal advisors, insurance Advisors, Asset Management Company etc, or any other organisation or individual as deemed necessary; and (iii) seek record and information from relevant stakeholders as deemed appropriate for the purpose.
The Terms and Reference (ToRs) of the committee shall be to review matters pertaining to the cost of setting up private power generation units in the country under various power policies, without limitation, whether under IPPs mode for under government ownership, approvals, financing arrangements, set-up cost, cost of over-runs if any, operating cost and cost models, revenues and return models, billing, cost to the government, role of government, its departments and various regulatory bodies etc, and identify any unethical or illegal practices, administrative procedural weakness and regulatory gaps that may have taken place and recommend the way forward to rectify these (a) review matters pertaining to the ' circular debt' of the country, without limitation, the cause of build-up of circular debt, examine payments made from time to time to clear outstanding dues to the IPPs, examine causes for under collection of revenue by Discos, electricity tariff determination, policies and procedures, systematic issues, which may have exacerbated the situation, etc, and indentify any unethical or illegal practices, administrative and procedural weaknesses and regulatory gaps that may have taken place and recommend the way forward to remedy these; and (b) review policies and models of power sector globally and recommend the way forward for changes in the country's power policy and structure of the sector including without limitation, generation, transmission, distribution, organizational set-ups, regulatory reform, governance reform, financial clearing, market-based mechanisms etc, with a new to ensure avoidance of circular debt in the future and reduction of cost of power to consumers.
The committee will also review the compliance of IPPs with the parameters and terms and conditions of various agreements signed with relevant government agencies/ bodies which shall include without limitation, the following areas: (i) any relaxation given to the IPPs in violation of policies/rules, including but not limited to tariff determination, financial closure, construction period, capacity payments and merit order etc; (ii) efficiency ( machine as well as plant/ fuel) allowed in tariff and actual efficiency, frequency of efficiency verification, fuel costs and inventory etc; (iii) cost accounting mechanism and review of various cost components; and (iv) review of technology, capital costs and financial structure submitted for tariff determination.
The committee will submit phase-wise findings/reports from start date to Prime Minister ie first interim report within six weeks, second interim report within 10 weeks and final consolidate report within two months.
An official told Business Recorder that the name of Chairman Committee was forwarded by the Prime Minister's office.
On Monday, when Minister for Energy was quizzed as to how, when almost all the private power producers including renewable energy projects are facing probe, new investment will come in to the country, he replied that a committee has been constituted to discuss all such issues.
