The government cannot cancel contracts signed with private power companies at will because they are backed by sovereign guarantees, making the process of termination lengthy and complex, Energy Minister Iqbal Hassan Mahmud said recently.
Responding to a supplementary question from reserved seat MP Mardia Mumtaz in the parliament, the minister said the previous "fascist government" had handed over several power plants to private companies.
"In those agreements, sovereign guarantees were given, meaning the state itself guaranteed the contracts. Canceling such guarantees is a lengthy process. We are trying to negotiate with them on several issues, particularly late payment fees, which we are refusing to pay. Hopefully, these discussions will be fruitful," he said.
He added that once a power plant enters production, the system cannot be patched or run through ad hoc negotiations.
"Therefore, as long as contracts remain valid, we will try to reduce prices and ensure electricity at affordable rates," the minister said.
