In a major step, govt approves new power provision system to SEZs, Industrial Estates

Celina Ali

Islamabad: A meeting of the Cabinet Committee on Energy chaired by Prime Minister Muhammad Shehbaz Sharif on Tuesday approved a new power provision system to the Special Economic Zones (SEZs) and Industrial Estates to accelerate the pace of industrial development.

The committee allowed the provision of power supply to the Industrial Estates and Special Economic Zones at one point, allowed their management to give electricity connections, collect bills, and other related matters themselves, under a summary moved by the Power Division.

The prime minister chaired a meeting of the cabinet committee on energy. The meeting was attended by Deputy Prime Minister and Minister for Foreign Affairs Ishaq Dar, Ministers Ahsan Iqbal, Ahad Khan Cheema, Sardar Owais Khan Leghari, Minister of State Ali Pervaiz Malik, Special Assistant Muhammad Ali, Prime Minister’s Coordinator Rana Ahsan Afzal, and other senior officials, PM Office Media Wing said in a press release.

In a major step, Govt. approves new power provision system to SEZs, Industrial Estates In a major step, Govt. approves new power provision system to SEZs, Industrial Estates

The meeting was told that the new system was a major step by the government under the prime minister’s leadership for the industrial development.

Under this system, the intervention of power distribution companies officials in SEZs and Industrial Estates was ended. A specific operations and management mechanism was being developed in this regard. The Power Division and NEPRA would implement this mechanism within the next two to three months, it was told.

Under the new system, zone developers would not require any additional license to supply electricity to industries within the zones. The system would facilitate competitiveness among industries, thereby boosting industrial development and exports.

The prime minister directed the implementation of this new system in all special economic zones.

The prime minister, in his remarks, said that the industrial development was crucial for the national progress. “With Allah’s grace, we are swiftly moving towards fulfilling the promise of ease of doing business. The provision of electricity at uniform tariffs will accelerate the pace of industrial development in the country. With industries functioning, more job opportunities will be created, and exports would be enhanced,” the press release quoted the prime minister as saying.

He expressed the hope that the improved electricity transmission system at SEZs would enable industries to play a pivotal role in the country’s economic development.

The power division also presented with a report over the circular debt for July to November 2024.

The meeting was told that positive outcomes of prime minister’s power sector reforms continued to emerge as a reduction in circular debt, in the first five months of the current fiscal year compared to the previous year, was recorded.

In July to November 2023, the circular debt had increased by Rs. 368 billion, whereas in the first five months of 2024, it was decreased by Rs. 12 billion.

Thus, there had been an overall improvement of Rs. 380 billion in circular debt compared to the previous fiscal year. After a 4% increase, the recovery in the power sector had reached 96% in the first five months of the current fiscal year whereas losses in power distribution companies had decreased by Rs. 53 billion following improvements, the meeting was told.

The meeting was further informed that the overall cost of electricity had been reduced by Rs. 4.64 per unit in the current fiscal year, made possible by reforms.

Addressing the meeting, the prime minister said that history bore witness that they had always brought the country out of darkness whenever given the opportunity, adding the process of power sector reforms was ongoing and the benefits were gradually emerging.

“We are taking steps to provide low-cost, environment-friendly, and uninterrupted electricity to the public. We are working on revising agreements with IPPs to further reduce the cost of electricity for consumers,” he added.

The prime minister also commended the power division and relevant institutions for their efforts in reducing circular debt and implementing reforms in the sector.