ISLAMABAD: In an attempt to address the long-standing financial and operational challenges in the country’s power sector, the prime minister has announced the formation of a high-level task force dedicated to implementing structural reforms.

The initiative aims to reduce the “financial burden of the sector being borne by the federal government and to enable the establishment of an efficient, liquid and self-sustaining competitive power market”, according to a notification issued on Sunday.

The task force, chaired by Federal Minister for Power Sardar Awais Ahmad Khan Leghari, also includes representatives from various regulatory bodies.

Former caretaker federal energy minister Muhammad Ali, rehired as the premier’s special assistant on power with the status of minister of state, will serve as the co-chairman of the task force, with Lt Gen Muhammad Zafar Iqbal, HI (M), taking on the role of national coordinator.

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Other members include Syed Zakaria Ali Shah from the Secretariat Group, and nominees from Nepra, SECP, Central Power Purchasing Agency, and Private Power and Infrastructure Board.

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The task force’s responsibilities include recommending measures to make the power sector financially and operationally sustainable, overseeing the development of an efficient and liquid power market, and recommending the utilisation of excess capacity by industries and special economic zones to stimulate growth.

It will also review and recommend measures to reduce capacity payments, address malpractices in the setup of independent power producers (IPPs), ensure compliance with government agreements, and propose solutions to the circular debt stock issue plaguing the energy sector.

“The role of the task force shall not be restricted to fact-finding, and the task force shall also be responsible for overseeing the implementation of its recommendations,” the PMO said.

Mr Ali, the task force’s co-chairman, previously worked with intelligence agencies during the PTI government and produced an investigation report, leading to revised agreements with about three dozen old power producers.

The government at the time claimed more than Rs800 billion in savings over 25-year project lives through negotiations, mostly capping the exchange rate to Rs148 per US dollar.

However, Mr Ali’s call for a forensic audit of contracts and renegotiations with subsequent plants under the 2015 policy remained unimplemented even during his ministerial role.

Later, as caretaker energy minister, Mr Ali was instrumental in increasing gas tariffs by over 480 per cent before the February 2024 elections. His skills are expected to be utilised in dealing with private power producers, mostly set up under 2015 policy, including Chinese independent power producers.

Published in Dawn, August 5th, 2024