Korangi Association of Trade and Industry (KATI) has officially requested the Ministry of Energy to conduct a forensic technical and financial audit of the Central Power Purchasing Agency (Guarantee) Limited (CPPAG). This urgent call comes in light of concerns regarding the transparency and prudency of CPPAG’s financial transactions with Independent Power Producers (IPPs).
KATI’s review of recent Fuel Charges Adjustments (FCA) and Quarterly Tariff Adjustments (QTA) has revealed potential gaps in the verification processes used by CPPAG, raising questions about the accuracy of payments made to IPPs. Specifically, NEPRA’s reliance on data provided by CPPAG without independent verification has caused concern about the reliability of fuel consumption figures, heat rates, and other operational metrics submitted by IPPs.
The escalating cost of electricity in Pakistan is leaving industries unviable, placing a significant burden on businesses and threatening economic stability. Furthermore, due to a shortage of cash, CPPAG has been rationing payments to IPPs. The criteria used to determine this payment distribution are unclear, raising concerns about fairness and increasing the risk of financial corruption. Without a clear and transparent payment process, the risk of discrepancies in how funds are allocated among IPPs becomes a significant issue.
KATI is urging the Ministry to commission an independent audit to ensure that the principles behind payment rationing are fully transparent and that all payments to IPPs are handled with fairness and accountability. This audit is essential to protect the financial integrity of the power sector, restore public trust, and reduce electricity costs to enable industries to remain competitive.