Pakistan to probe private power sector after allegations of wrongdoing

Pakistan is planning to set up a commission to investigate suspected contract violations by independent power producers which may have cost the national exchequer billions of dollars.

Pakistan has a transmission power generation capacity of around 26,000MW, more than half of which comes from independent producers.

Successive Pakistani governments have pursued private sector investment in power production, offering lucrative returns backed by sovereign guarantees. But the current government of Prime Minister Imran Khan has decided to look into the contracts after he was presented with a 278-page report by a government committee which outlined a number of alleged transgressions.

There are about 40 independent power producers and the report did not mention any by name. Company representatives have consistently rejected allegations of wrongdoing but did not immediately comment on the report.

Imran Khan ordered the report, which alleges that some independent power producers made billions of dollars in questionable deals, to be made public. Some of the private sector deals date back as far as 1994. Previous governments said the incentives were necessary to attract investors unwilling to put money into an uncertain Pakistani economy.

Pakistan's energy ministry held a meeting with independent power producers last week after some of the report's contents were leaked to the media, and a statement which followed said it was held to seek "their contribution in rationalization of tariffs".