Water & Power Minister Raja Nadir Pervaiz said on 27 April that the government had received sworn declarations from 20 independent power producers (IPPs) denying their involvement in corrupt business deals. Only one firm had sought more time to submit its declaration as its chief executive was out of the country.

'We have received declarations from 20 companies saying they had not indulged in corrupt practices,' Pervaiz said. The government had issued a decree in early April which gave it the power to cancel deals with IPPs found guilty of paying kickbacks to obtain deals during the government of former prime minister Benazir Bhutto.

The IPPs had been given until 27 April to submit their contract details with the former government. The declarations will now be sent to the Ehtesab Cell, a body formed by the government of Prime Minister Nawaz Sharif to combat corruption.

Pervaiz said the government plans to take serious action against firms found guilty of paying kickbacks or bribes for contracts. The notice requiring IPPs to submit declarations was issued by the Water & Power Development Authority (WAPDA) and Pakistan State Oil (PSO).

The government asked IPPs in March to reduce their power tariffs by up to 30 per cent as WAPDA was unable to pay $0.072 a kWh, which had been agreed by the government of Benazir Bhutto. The power is sold to consumers for $0.06 a kWh. In 1996/97, WAPDA paid the IPPs $795 million and reported a deficit of $173 million after a surplus of $404 million the previous year. The bill is expected to rise to $1,360 million in 1997/98.

Pervaiz said he was holding talks with individual firms to renegotiate the tariffs they charge WAPDA on a case-by-case basis. 'The negotiations are quite positive.' However, he did not say by how much the IPPs will reduce the tariff.

The row between the government and IPPs has resulted in a decline in the share prices of IPPs and has shaken investor confidence in Pakistan. The present government claims that the former government had taken millions of dollars in bribes to award contracts to the IPPs during 1993-1996. The then prime minister Benazir Bhutto denies the charges.