Ali Pervaiz Malik's Big Announcement Regarding Electricity Bill Relief

ARY NEWS

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Transcript

00:00The Prime Minister has delayed the increase in electricity prices and has not ended it.

00:05It will increase from the 1st of October.

00:08There is a three-month relief for the consumers of 200 units, not a full year.

00:12There is a delay, there is a temporary relief.

00:14There is a permanent solution, you do not have it even today.

00:17If this problem was not so big, then why did the Prime Minister intervene yesterday

00:22and why did he give a relief of 50 billion?

00:24The logic behind it is that this time you got unprecedented heat in the month of May and June.

00:36Because of which people's customer categorization has changed.

00:40Because you know that people in the consumption of up to 200 units fall into two categories.

00:47First is the protected customers whose consumption is within 200 units for 6 months.

00:54And then there are the normal 200-unit consumers on whom the tariffs are higher

01:00and they do not fall in the protected category.

01:02When there was so much heat in May,

01:05then about 7 lakh people, I am talking about the customers of LESCO alone,

01:11they were transferred, they transitioned from protected to unprotected category.

01:18Because of which a substantial increase came in their budgets.

01:22So the Prime Minister has offloaded that burden for those customers

01:27and insulated the price revision 3 for the unprotected and unprotected customers of up to 200 units from them.

01:37And for this year, I think this will be a permanent measure.

01:41I will tell you how, although the relief has been budgeted for 3 years

01:46and what is its more permanent solution, I will also point it out to you.

01:50For this year, the permanent relief is such that your ambient temperature

01:55peaks in July, August, September and after that the consumption starts to drop.

02:01So when the consumption starts to drop, then the unit billing of the customers will be reduced

02:06and after that they will again fall back into the protected category.

02:10So they will get a lot of insulation from that and then we will face this challenge

02:14when you will go back to the higher consumption cycle next time.

02:18And on top of this, your observation is correct that this is a temporary relief

02:24in the sense that you have shielded them for a year.

02:27For that, the second thing you will have to do is that you need widespread surgery in your power sector.

02:37Because in this, different types of problems have slowly permeated.

02:41Your capacity payments for all the plants are skyrocketing.

02:47Your on-grid consumption is squeezing the denominator in all these calculations

02:54because of economic hardships and people migrating to off-grid solutions.

03:00So you will have to see that too, you will have to see your PPS,

03:04you will have to sit again with the power plants and you will have to open these negotiations

03:09in which you will have to reprofile them.

03:12All these new plants, their debt is front-loaded and their useful life is more than 20 years.

03:18So if you spread it more evenly, that will also cushion you.

03:22Then in the GENCOs, Prime Minister and GENCOs are those thermal plants

03:28which are under the control of the government and mostly they are inefficient plants

03:32which are either shut down or gas guzzlers or furnace oil guzzlers.

03:36So by shutting them down, they have also been told to liquidate

03:40and that those proceeds will be used to offset other liabilities in the power sector.

03:45Apart from this, the privatization of distribution companies is also being carried forward at full throttle.

03:50You know their boards.

03:52Today, the law has also been passed in the National Assembly,

03:55after which their boards will be depoliticized and you will populate them with professional people

04:01and there will also be improvements in governance from there.

04:04Guys, you are also working in transmission.

04:06So apart from moving ahead with the reform agenda in the medium term,

04:13there is no way to shield every customer category which is now challenged by your increasing power prices.

04:20And mind you, despite the increase in these prices,

04:24we are accumulating around 500 to 600 billion new circular debt every year.

04:31So for this, we need to take a multidimensional reform-oriented approach.

04:35Inshallah, Prime Minister Shabaz Sharif and Awais Laghari Sahib who is heading this department

04:41and they are fully prepared to follow the path of these reforms.

04:47The reform you are talking about, your government has also made mistakes in it.

04:52Was the decision to install imported coal plants of Noon League correct in your opinion?

04:56When you installed the Hapco power plant of 1320 MW, a lot of people criticized it at that time.

05:01Technically, we could have backed out but we chose not to.

05:03Even today, more nuclear plants are being installed, Chashma 5.

05:07When we do not have the money to pay for it, we have the excess electricity.

05:12More are being installed.

05:13So today, the financial expenses related to CPEC schemes have become unsustainable for the Pakistani economy.

05:21These are all things you need to revisit.

05:28To solve these issues, you need to review the CPEC schemes from China.

05:35There is no moving forward.

05:37Inshallah, we will do everything that it takes to address this matter.

05:43Whether it is a fixed charge component or a fuel component.

05:48In which you proposed to convert from imported coal to go towards the development of third coal.

05:55To go towards the utilization of third coal.

05:57All these things are being considered in Jamshoro.

06:01The rest of the plants that you have installed on Port Qasim are also being planned for it.

06:04But all these require substantial capital injection.

06:08So you will take them with the agenda of reform.

06:12And you are absolutely right.

06:13The finance minister and the power minister have been given the task to go with the Chinese leadership.

06:19If you want to go towards the reprofiling of the CPEC projects, then explore that too.

06:28Because we need to now ensure that we work on a multidimensional level.

06:34Control the inflation that is coming in the price of electricity.

06:38Because now its fallout is coming directly on your economic landscape.

06:43Severely businesses are challenged.

06:45Severely your consumers are challenged.

06:47And the government does not have the resources to shield them directly.

06:51So we have to get to the bottom of this problem.

06:53Where is all this coming from?

06:55Where is the genesis coming from?

06:57Inshallah, we will try to attain it completely.

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