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The federal cabinet, chaired by Prime Minister Shehbaz Sharif, has approved revised agreements with 14 Independent Power Producers (IPPs), potentially reducing electricity prices by up to Rs11 per unit.
Based on the Power Division’s recommendations, the cabinet endorsed renegotiated contracts with these IPPs, leading to a reduction of Rs802 billion in profits and costs. Additionally, Rs35 billion will be recovered from excess profits earned by these IPPs over past years.
Of the 14 IPPs, ten operate under the 2002 power policy, while four fall under the 1994 policy. One IPP contract from the 1994 policy has been canceled as part of the revisions. The updated agreements are expected to generate total savings of Rs1.4 trillion over the contract terms, with annual savings of Rs137 billion, benefiting electricity consumers significantly.
Prime Minister Shehbaz Sharif lauded the revised agreements as a critical achievement. He highlighted their role in reducing the national treasury’s burden, addressing circular debt, and lowering electricity prices.
Major Mergers to Enhance Efficiency
As part of the government’s fiscal austerity and restructuring measures, the cabinet approved two major organizational mergers:
Ministry of Narcotics Control and Ministry of Interior
The Ministry of Narcotics Control will now function as a wing within the Ministry of Interior, with the Anti-Narcotics Force (ANF) serving as an attached department. This merger is expected to save Rs183.25 million annually through reduced administrative costs, salaries, and office maintenance expenses.
Aviation Division and Defense Division
The Aviation Division will merge with the Defense Division, reverting to the pre-2013 setup when Civil Aviation Affairs were managed by the Ministry of Defense. The merger aims to enhance airspace management and save Rs145 million annually.
Other Key Cabinet Decisions
Public Procurement Rules Amendment
The cabinet approved the addition of Section 45-A to the Public Procurement Rules, 2004. This amendment allows procuring agencies to delegate all or part of their procurement processes to other agencies, ensuring flexibility and efficiency.
National Commission for Minorities Act 2024
The cabinet approved the draft of the National Commission for Minorities Act 2024, which will now be presented to Parliament for consideration.
Extension of Service
Dr. Muhammad Bashir’s contract as Member of the Technical Environment Tribunal, Islamabad, has been extended for two years on the recommendation of the Ministry of Law and Justice.
These decisions underscore the government’s focus on fiscal discipline, institutional efficiency, and public welfare.
