ISLAMABAD: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has moved the Supreme Court of Pakistan for a forensic audit of independent power producers (IPPs), amid a worsening cost-of-living crisis in the South Asian country.
The development comes amid protests in Rawalpindi and Karachi by thousands of supporters of the Jamaat-e-Islami (JI) religio-political party, who have been calling for a review of Pakistan’s loss-making agreements with IPPs, reduction in power tariffs, revocation of additional taxes introduced in the last budget and other similar measures.
Pakistan has the highest electricity tariffs in the region and the government is currently on track to pay Rs2.1 trillion to the IPPs in capacity payments this fiscal year, while circular debt for the energy sector in 2024 reached Rs. 5.422 trillion. At the same time, numerous IPPs are being paid billions despite not producing any electricity.
All IPP contracts for the sale of electricity are structured in two tiers. First, the power purchaser is required to make “capacity payments,” which are required to cover all fixed costs of the IPPs, including debt repayments as well as Operations and Management costs (O&M Costs) and return on equity (RoE) at a stipulated rate, according to the FPCCI.
These capacity payments are to be made by the power purchaser whether or not any electricity is actually purchased. In addition to capacity payments, there is a variable cost attributable to the production of energy above a certain plant capacity factor (normally 60 percent). In other words, if more than 60 percent of a plant’s capacity is utilized for electricity generation, then the relevant IPP is entitled to additional payments. Fuel cost is treated as a pass-through item.
“In the light of the foregoing, it is respectfully prayed that this Honourable Court may be graciously pleased to direct the Government of Pakistan to commission a detailed and thorough forensic audit of all IPPs,” the FPCCI prayed in its petition, urging for the recovery of excess profits earned by IPPs, renegotiating all IPP agreements, and removing anomalies regarding the calculation of Internal Rate of Returns (IRR) on equity investments in all IPP agreements.
The FPCCI referred to a 288-page report by Committee for Power Sector Audit, Circular Debt Resolution and Future Roadmap from 2020, which it said identified more than Rs100 billion worth of excess payments made to IPPs and recommended a number of steps to identify power sector problems, including conducting a forensic audit and the recovery of prior excess payments.
“Till date, no such audit has been conducted nor have any prior excess payments been recovered. More importantly, there is no public explanation for why the 2020 Report remains unimplemented,” it noted. “Pakistan’s power sector is a thus a paradigmatic example of regulatory capture, where year after year the people of Pakistan continue to suffer at the hands of predatory elites.”
The FPCCI said the current situation was not only placing an “unbearable burden” on domestic consumers, but it was also forcing industries to either go off-grid or shut down, while the government was trying to recover higher and higher tariffs from a smaller and smaller pool of customers.
One of the main reasons for Pakistan’s perennial economic crisis is its electricity sector. Pakistan is on track this year to pay approximately Rs3.58 trillion in payments to electricity generating companies. Out of this total amount, approximately Rs2.63 trillion is likely to be recovered, while the remainder will be subsidised by the government. This unrecovered amount will be added to already existing circular debt of Rs5.422 trillion, according to the petition.
Currently, Pakistan has installed generation capacity of 45,885MW. Out of this, 23,860MW (52 percent) has been installed by state-owned entities (both federal and provincial), while the remaining capacity of 22,043MW (48 percent) has been installed by IPPs. It is important to note that as against its installed generation capacity of 45,885MW, the maximum power demand during the summers is around 30,000MW while winter peak loads are closer to 12,000MW.
Notwithstanding this current oversupply of electricity, IPPs are scheduled to add another 7,460MW of electricity by 2032. This capacity is in addition to the 11,550MW due to be added through the government’s own projects (4,320MW Dasu Hydroelectric Project due for completion in 2026, 4,500MW Diamer-Basha Hydroelectric Project due in 2029, 1,530MW Tarbela 5 extension due in 2026, and 1,200 MW Chashma 5 nuclear plant due for completion in 2031.
“It is estimated that during the current financial year (i.e. 2024 – 2025), capacity payments will total Rs2.1 trillion (equal to about 1.9 percent of GDP). In FY 2023-24, 45 percent of capacity payments were made to the government-owned plants, 15 percent to private parties (mostly local) and 40 percent to IPPs set up under CPEC (China-Pakistan Economic Corridor),” the FPCCI said.
“Notwithstanding the trillions being paid as capacity charges to the IPPs, actual capacity utilization of the IPPs is very low. In some cases, IPPs are getting paid billions in capacity charges without generating a single unit.”
It said it was also important to note the exponential manner in which such charges had increased.
“In 2015, an average of 13,000MW electricity was being consumed with capacity charges of Rs200 bn (against an installed capacity of about 20,000 MW). Today, consumption still averages around 13,000MW but capacity charges have increased by more than 1000 percent to Rs2.1 tr (against an installed capacity of about 45,885 MW),” the FPCCI added.
Pakistani industrialists move top court for forensic audit of independent power producers
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Pakistani industrialists move top court for forensic audit of independent power producers
- The development comes amid protests in Rawalpindi, Karachi for reduction in power tariffs and review of Pakistan’s loss-making agreements with IPPs
- Pakistan has highest tariffs in the region and the government is currently on track to pay Rs2.1 trillion to IPPs in capacity payments this fiscal year
Court orders transfer of graft case against ex-PM Khan after changes to Pakistan accountability laws
Court orders transfer of graft case against ex-PM Khan after changes to Pakistan accountability laws
- Supreme Court last week restored amendments to anti-graft laws, limiting accountability watchdog’s jurisdiction to graft cases of over Rs500 mln
- Interestingly, Khan, who had petitioned the top court against the changes, has become a direct beneficiary of the restored amendments to the laws
ISLAMABAD: An accountability court on Monday barred the National Accountability Bureau (NAB) from pursuing a graft case against former prime minister Imran Khan and his wife, Bushra Khan, and ordered its transfer to another court, local media reported.
The case, also called the new Toshakhana reference, came to the fore after the accountability watchdog arrested the couple following their acquittal in an illegal marriage case on July 13. It pertains to a jewelry set, comprising a ring, bracelet, necklace a pair of earrings worth over €380,000 (Rs138 million), gifted to the former first lady by a foreign dignitary that was allegedly undervalued by the couple and retained against a lesser price.
The Supreme Court of Pakistan last week restored amendments to the country’s anti-graft laws approved in 2022, limiting NAB’s jurisdiction to cases involving corruption of over Rs500 million, reducing the term of the chairman of the bureau and prosecutor general to three years and transferring all pending inquiries, investigations and trials to other authorities.
On Monday, Accountability Court Judge Muhammad Ali Warraich heard post-arrest bail applications of Khan and his wife in the new Toshakhana case after they were brought before the court from jail, Pakistan’s Dawn newspaper reported.
“The court declared that following the NAB amendments, the reference in question ceased to come under the anti-graft body’s jurisdiction, therefore, it will now be transferred to the FIA court, which will rule on bail,” the report read.
Khan had petitioned the top court against the amendments, claiming they were brought to benefit the influential, including top politicians, and would legitimize corruption in the country.
Interestingly, Khan, who has been in jail since August last year on a slew of charges, has become a direct beneficiary of the restored amendments after being able to move the courts for his acquittal in at least two major corruption cases, namely a land bribe case involving a 190-million-pound bribe and the investigation involving the illegal sale of state gifts.
“It’s safe to say new Toshakhana [state gifts] case against Imran Khan can no longer continue as it exceeds Rs500 million cap, making it ineffective, as per the new amendments,” Khan’s Pakistan Tehreek-e-Insaf party said last week after the Supreme Court approved the amendments. “It will also impact the £190 million case.”
The ex-premier was convicted in four cases. Two of the cases have since been suspended and he was acquitted in the remaining two, including the illegal marriage case.
Khan’s convictions had ruled the 71-year-old out of the February general elections as convicted felons cannot run for public office under the Pakistani law. Arguably Pakistan’s most popular politician, Khan says the cases against him are “politically motivated,” aimed at keeping him from returning to power. Pakistani authorities deny this.
The ex-premier is also facing multiple cases relating to May 9, 2023 protests, which saw his supporters attack government and military installations over his brief arrest in a graft case.
Imran Khan party leaders arrested as crackdown begins over violations of Pakistani law on rallies
- Gohar Khan, Shoaib Shaheen and Sher Afzal Marwat arrested a day after Khan’s PTI party held a rally in Islamabad to press for his release
- The Islamabad administration on Sunday informed officials of Khan’s party they had failed to conclude their rally by appointed time
ISLAMABAD: The Islamabad police said on Monday they had arrested the chairman and two other members of former prime minister Imran Khan’s party on charges of violating a new law to regulate public gatherings in the Pakistani capital.
The development came a day after Khan’s Pakistan Tehreek-e-Insaf (PTI) party held a rally in Islamabad to press authorities for the release of the former prime minister, who has been in jail since last August.
The government last week passed the Peaceful Assembly and Public Order Act, 2024 to streamline the process for obtaining permission to hold public gatherings in Islamabad and designating specific areas for such activity.
The Islamabad administration had allowed the PTI to hold the rally in Islamabad from 4pm till 7pm on Sunday, but later said in a letter to PTI Islamabad President Amir Masood Mughal that the condition had not been adhered to by the party.
“Three PTI leaders, Barrister Gohar Khan, Shoaib Shaheen and Sher Afzal Marwat were arrested today,” Islamabad police spokesperson Taqi Jawad told Arab News.
“They were arrested due to violation of new law, the Peaceful Assembly and Public Order Act, in PTI gathering on September 8.”
The new law proposes three-year jail terms for participants of “illegal” assemblies, with ten-year imprisonment for repeat offenders.
Footage shared by the PTI on X showed its chairman Gohar Khan being taken away by the Islamabad police.
“The chairman of Pakistan’s largest political party with the biggest voter base, Barrister Gohar, has been arrested at the gates of Parliament along with other PTI leaders and Members of the National Assembly,” the PTI said on X.
“This shows how opposition is being suppressed using brute force.”
Khan’s PTI says it has faced a months-long crackdown since protesters linked to the party attacked and damaged government and military installations on May 9, 2023, after Khan’s brief arrest that day in a land graft case.
Hundreds of PTI followers and leaders were arrested following the riots and many remain behind bars as they await trial. The military has also initiated army court trials of at least 103 people accused of involvement in the violence.
“The government and the establishment have been in depression since yesterday’s rally and the leaders of Tehreek-e-Insaaf are being arrested right now,” Shahbaz Gill, a PTI member and Khan ally, said on X.
“Will all this help stop this movement? Get some sense. This is Imran Khan’s time.”
Khan, who has been in jail since August last year, faces a slew of charges and was convicted in four cases since he was first taken into custody, all of which have been either suspended or overturned by the courts. He remains in jail, however, on new charges brought by Pakistan’s national accountability watchdog regarding the illegal sale of gifts from a state repository while he was prime minister from 2018 till 2022.
The ex-premier has waged an unprecedented campaign of defiance against Pakistan’s powerful military and blamed the then army leadership of orchestrating his ouster in a parliamentary no-trust vote in April 2022. The army says it does not interfere in political affairs.
Dutch court convicts two Pakistanis over death threats to anti-Islam lawmaker Geert Wilders
- Court found Muhammad Ashraf Asif Jalali guilty of attempting to incite Wilders’ murder
- It also convicted Tehreek-e-Labbaik Pakistan leader Saad Rizvi of the same charges
SCHIPHOL: A Dutch court convicted two Pakistani religious and political leaders in their absence Monday over calls to their followers to murder anti-Islam lawmaker Geert Wilders, the leader of the Party for Freedom that won last year’s general election in the Netherlands.
Wilders has lived under round-the-clock security for nearly 20 years due to the thousands of threats to his life following his outspoken criticism of Islam. His bodyguards and two armed military police sat in the courtroom for Monday’s hearing.
Neither of the defendants was in court to hear the verdicts. They are believed to be in Pakistan and are unlikely to be turned over as Pakistan has no extradition agreement with the Netherlands. Prosecutors said last week that requests they sent to Pakistani authorities seeking legal assistance to serve subpoenas on the two men were not executed.
The court found Muhammad Ashraf Asif Jalali guilty of attempting to provoke murder and incite Wilders’ murder with a terrorist intent and of issuing threats. He was sentenced to 14 years, in line with a sentence demand made last week by prosecutors.
The court said that Jalali is a religious leader whose website claims he has millions of followers around the world. It said his comments to his followers “infringed Wilders’ personal privacy very seriously,” and added that such threats “can also harm freedom of expression in general, while a democratic society benefits from being able to exchange opinions without physical danger.”
In the second case, the court convicted Saad Rizvi, who leads the Tehreek-e-Labbaik Pakistan, or TLP, for incitement to murder and threatening Wilders. He was sentenced to four years, two years less than prosecutors had requested. He got a lower sentence in part because the court ruled that his comments posted on social media did not amount to a terrorist crime.
Wilders welcomed the verdicts and sentences from the three-judge panel.
“I’m very pleased about it. It’s really, I believe, the first time ever in Holland that an imam, from abroad in this case, is being sentenced for an a long jail sentence for putting a fatwa on the head of a parliamentarian in the Netherlands. My head. And I’m very pleased about that,” he said outside the courtroom.
They are not the first Pakistani men convicted and sentenced in the Netherlands for threats targeting Wilders.
Last year, a former Pakistani cricketer, Khalid Latif, was sentenced to 12 years in prison over allegations that he had offered a reward for the death of Wilders. Latif also did not appear for trial and is not in custody in the Netherlands. Rizvi publicly praised Latif, the court ruled Monday.
Also, in 2019, a Pakistani man was arrested in the Netherlands, convicted and sentenced to 10 years for preparing an attack on Wilders, who is sometimes called the Dutch Donald Trump.
A prosecutor, who asked not to be identified for security reasons, told judges last week that threats began to be aired on social media after Wilders’ announcement that he was organizing a competition for cartoons of the Prophet Muhammad (Peace Be Upon Him) in 2018. The planned contest sparked angry protests in Pakistan and elsewhere in the Muslim world.
Physical depictions of the Prophet (PBUH) are forbidden in Islam and deeply offensive to Muslims.
Wilders told judge last week about the way the threats had affected his life.
“Every day you get up and leave for work in armored cars, often with sirens on, and you are always aware somewhere in the back of your mind that this could be your last day,” he said.
In a first, Pakistani Shariah-compliant insurance provider introduces instant withdrawal facility
- The new service will allow participants to withdraw partial funds in case of emergencies through the company’s mobile app, online portal
- Company official says this unique facility represents a ‘significant step forward’ in the evolution of Islamic financial services in Pakistan
KARACHI: The Pak-Qatar Family Takaful Limited (PQFTL), a leading Pakistani Shariah-compliant family insurance provider, has introduced instant withdrawal facility for its customers, the company said on Monday, adding that this is the first time that a takaful operator in Pakistan had offered such a facility.
The PQFTL is a technology-driven Shari’ah-compliant company providing innovative takaful (insurance) solutions since 2007, according to the Pakistan Credit Rating Agency (PACRA).
The PQFTL said the new service would allow participants to withdraw partial funds in case of emergencies with ease and instant access through the company’s mobile app or its online portal.
“Our strategic approach not only enhances our end-to-end service delivery but also aligns with our vision to provide innovative and customer-centric financial solutions,” Waqas Ahmad, CEO of the PQFTL, said in a statement.
“We believe this facility will greatly benefit our participants by providing them with unprecedented ease of access to their funds.”
This integration will enable participants to easily draw their funds, enhancing convenience and accessibility for the users, according to the company.
“This unique facility represents a significant step forward in the evolution of Islamic financial services in Pakistan, providing customers with more flexibility and control over their financial assets,” it said.
“PQFTL remains committed to driving innovation and excellence in the Islamic financial services industry and this initiative is a display of PQFTL’s dedication to prioritizing customer satisfaction and convenience.”
Pakistani court denies bail to woman in Karachi hit-and-run case despite pardon
- Natasha Danish caused a fatal accident while driving under drug influence last month
- Victims’ families pardoned her, but court says the drug case filed by the state to proceed
KARACHI: A Pakistani court on Monday denied bail to a woman accused in a high-profile hit-and-run case, dashing her hopes for immediate freedom after the family of two people who died in the crash pardoned her in a manslaughter case last week.
CCTV footage of the accident was widely circulated on social media last month, showing a Toyota Land Cruiser, allegedly driven by Natasha Danish, the wife of well-known businessman Danish Iqbal, hitting a motorbike from behind, resulting in the death of a female student and her father. Five others were also injured in the incident.
Initially, the defense lawyer told the local court his client was undergoing psychiatric treatment to secure her exemption from court appearances. However, hospital authorities said the suspect’s family could not provide any evidence of the claim, saying she was under the influence of drugs at the time of the accident.
Last week, the court granted the suspect bail in the manslaughter case after the families of those killed and injured submitted affidavits, saying they had forgiven her for the accident. However, the court reserved judgment in the second case filed against her for drug use.
“This Court in its humble view finds applicant/accused failed, to be admitted to post-arrest bail in absence of reasonable ground,” Judge Muhammad Raza Ansari, civil judge district east, declared in a written order. “Therefore, instant bail application stands dismissed, accordingly.”
According to the order, the defense attorney had challenged the applicability of Section 11 of The Prohibition (Enforcement of Hadd) Order, 1979, arguing that the legal provision dealt only with alcohol, while his client was accused of using methamphetamine, commonly known as ice.
The judge, however, dismissed the argument, stating that the law was “not confined to intoxicating liquor only” but also covered other substances.
Section 11 of The Prohibition (Enforcement of Hadd) Order, 1979, stipulates that any Muslim caught in violation can be punished with up to three years in prison, 30 lashes or both.
The defense lawyer further argued the blood test of his client had not returned positive for the drug and raised concerns over the safe custody of the urine sample, which showed the presence of methamphetamine, during a public holiday.
The judge rejected both arguments, citing expert opinion on the matter.
Additionally, the defense counsel claimed the accused had already been pardoned by the victims’ family.
However, the court rejected this reasoning as well, saying that the legal heirs’ pardon could not impact the second case, which was filed by the state.
The court emphasized that methamphetamine consumption was a “new evil” gripping society and must be curbed.
It also described the accused as a “well-educated lady with a good sense of living and law,” adding that she still decided to drive the vehicle while intoxicated, resulting in the deaths of two people and injuries to others.
