00:00Mr. Miftad, tell us, this IPP issue, I mean, everyone is telling us a new story.
00:06First it started in 1994, then in 2002, and then in 2003.
00:12And when the government started this and made such agreements,
00:16it was visible that these agreements were wrong, but these agreements were made.
00:19And now, the latest findings,
00:22the other day in our program, one of our benefactors, Mr. Hafiz Khan, the lawyer, was telling us
00:26that if these agreements are not implemented, we will have to suffer until 2050.
00:31In simple words, please explain why these agreements were made,
00:36whose fault was it, and why are we still suffering as a sovereign country?
00:46Yes, thank you, thank you very much.
00:47Look, I will try to explain what I understand in simple words.
00:56First of all, it should be said that in today's time,
00:59look, these agreements were made in 1994, in 1994, they were made under the policy of Shaheed Muhtar Mahbutto,
01:05in which we gave 6.5 cents of electricity, a separate pass-through for fuel,
01:10and were giving a return on investment of 15 to 17% dollars.
01:16That policy was brought by Mr. Musharraf in 2002, when he reviewed that policy,
01:23and he made another amendment in 2007,
01:31in which he said that the investment in rupees will also be returned in dollars.
01:35He indexed it from dollars to 15%.
01:38This was the policy in 2007.
01:41After that, a lot of plants were installed, and then again in 2012,
01:44there was a huge shortage of electricity, so when Mr. Nawaz Sharif came to power,
01:47he brought another policy in 2015.
01:50And a lot of plants were installed in it, but it also had a 17% guaranteed return,
01:55and there was no bidding.
01:56There was no bidding in 2004, and there was no bidding in 2007, and there was no bidding in this as well.
02:01In this, NEPRA used to give a rate, and if it came to you, you would invest it.
02:04After that, when Mr. Khan came to power, he did one good thing,
02:08he said that we will renegotiate this, and in 2020, a report came out by Mr. Muhammad Ali,
02:15in which he said that in a lot of IPPs, the ROI, Return on Investment, or IRR,
02:22Internal Return on Rate of Return, which he calculated, there were mistakes in that as well.
02:27In this, there are two mistakes in particular.
02:30One mistake was that, and I am saying a mistake,
02:33with a lot of ego in this, but you can put some other words in this as well.
02:37One mistake was that the company that needs 160 grams of furnace oil to make 1 kilowatt hour,
02:44you are giving them 180 grams of money.
02:47So, that becomes 20 grams per kilowatt hour extra.
02:50Similarly, one mistake is that if you want to buy coal from South Africa,
02:54then your price is less, that it is at $220 per ton, but the government is giving you $260 per ton.
03:03So, these were two types of mistakes, that they were being given more money for fuel,
03:06and they were being expected to use more, but they were not using that much.
03:12And then, Return on Investment was also very mixed.
03:14So, these were two or three mistakes.
03:16So, Mr. Khan, Mr. Imran Khan, in 2021,
03:19the plants that were installed during the time of Mr. Musharraf,
03:21they renegotiated those, and after that, their rates decreased a little.
03:25But the plants that were installed in 2015,
03:28which included the plants of the Chinese government,
03:30which included the plants of the government of Pakistan,
03:33and which included the plants of some Qatari investors,
03:35they were not able to renegotiate those,
03:37because the ones that were renegotiated in 2021,
03:40their bankers got their money back,
03:42and secondly, there was a lot of interference from the institutions,
03:45and because they were institutions, they were with Pakistani investors,
03:48they were a little more cooperative,
03:50but obviously, Chinese investors will not cooperate with our institutions like that.
03:54So, then there was a problem with the Chinese,
03:56which America also kept saying that you are renegotiating with China.
03:59Now, the policy adopted by the government,
04:01is that we will go to China and say that
04:03we will give you the money in the next 4 years,
04:05and we will give it to you in the next 10 years,
04:08and this is what we are trying to do now.
04:10Okay, Mr. Miftaz, I understood this.
04:12We will go further.
04:14When Prime Minister Nawaz Sharif made all these agreements in 2015,
04:19probably you were also a part of the party at that time,
04:22or the government, did you have any office or not?
04:24At that time, one opinion was that
04:27the agreements were right according to the international market,
04:30there was no mistake in that.
04:31And one opinion is that this has been ignored,
04:34criminal negligence has increased.
04:37So, in your opinion, was a mistake made at that time,
04:40or was it unintentionally made by you?
04:43I mean, what was the reason that you made such agreements
04:46that the poor Pakistani Imam is losing his voice?
04:50Look, brother, the four plants that have been planted,
04:54Bikki, Baloki, Haveli, and I think the fourth is Rahim Yar Khan,
04:57these plants are at very good prices,
05:00which run on LNG.
05:01It happened that you bid on it,
05:04which was between GE and Siemens and Mitsubishi,
05:08they bid and the price they gave was
05:11less than one and a half lakh dollars per megawatt from the price given by NEPRA.
05:15That is, NEPRA was saying that a megawatt plant should cost seven lakh dollars
05:19and your price was five and a half lakh dollars.
05:22So, because bidding was done on it, its price did not improve.
05:25There was no problem with that.
05:28The second was the price of coal.
05:31There was no bidding on coal and you had given a fixed tariff on coal.
05:35Okay, between 2013 and 2018,
05:38the costs of solar, coal, etc. have fallen very quickly.
05:42And NEPRA, of course, cannot do cost discovery, price discovery,
05:46which a businessman can do who has invested his money.
05:49So, the plants that were planted later, in 2016, 2017, and 2018,
05:54it is generally understood that they are a little more expensive than the market price
05:58and are cheaper in other countries.
06:00But I am talking about coal.
06:02I think LNG plants are at the best price in the world.
