, Shahid Rasheed Butt, former President of the Islamabad Chamber of Commerce and Industry, warned that the national economy is being systematically destroyed to favour Independent Power Producers (IPPs), while the escalating circular debt crisis and the heavy burden of capacity payments have directly affected the public and industry.
Addressing an emergency meeting of traders and industrialists on Tuesday, Shahid Rasheed Butt said that despite government claims, circular debt is continuously increasing due to rampant corruption. He stated that the country’s circular debt had reached Rs 5730 billion by July 2024 and is rising rapidly.
Mr. Butt revealed that annual capacity payments to IPPs have exceeded Rs 2091 billion and are expected to reach Rs 2800 billion in the next fiscal year. This has pushed electricity tariffs to unbearable levels, where capacity charges alone are Rs 15 to 17 per unit, constituting about 70% of the consumer’s total bill. He accused several IPPs of being involved in over-billing, false reporting, and extraordinary profiteering while avoiding transparent audits.
He further clarified that the burden of decades of corruption in the power sector will not be allowed to be shifted onto solar consumers. He condemned the proposals to reduce the net metering buy-back rate from Rs 27 to Rs 10 per unit and to impose capacity charges on solar consumers, calling them “sheer injustice.”
According to Mr. Butt, the real issues are not solar power, whose consumers have increased from 226,440 to 283,000 in three months, but expensive thermal power, heavy line losses, and the poor performance of distribution companies (DISCOs). He cited NEPRA’s 2024 report, which identified 170,848 single-phase and 10,281 three-phase faulty meters within DISCOs, leading to widespread incorrect billing.
The business leader stressed that the power sector is plagued by rampant corruption, political interference, and incompetence. He identified corrupt officials, who fear reforms and transparency, as the biggest obstacle to the necessary privatization of DISCOs.
At the end of his address, Mr. Butt demanded a comprehensive review of all IPP agreements and the identification of those responsible for corruption. He emphasized that to avoid a deepening energy crisis, genuine public relief must become the central focus of government policy, otherwise this crisis will trigger nationwide protests, accelerate inflation, harm employment and exports, and force businesses to shut down.