ISLAMABAD – The Competition Commission of Pakistan (CCP) has approved the joint acquisition of Uch Power (Private) Limited and Uch-II Power (Private) Limited by Sapphire Fibres Limited (Acquirer 1) and Mindbridge (Private) Limited (Acquirer 2).

The acquisition, formalized through a Sale and Purchase Agreement with UPLHC-I Limited (Seller 1), UPLHC-II Limited (Seller 2), and International Power Uch Holdings B.V. (Seller 3), will transfer 100 percent of the shares of Uch Power I and Uch-II Power to the acquirers.

The total cost for the acquisition includes a significant investment for both Uch Power I and Uch Power II. Both Sapphire Fibres Limited and Mindbridge Private Limited will equally share ownership, holding a 50% stake in each of the power plants.

Sapphire Fibres, a publicly listed company, operates in textiles manufacturing and power generation through its subsidiary, Sapphire Electric Company. Mindbridge, a private IT services provider, will now enter the power generation sector with this acquisition.

Uch Power and Uch-II Power are active in Pakistan’s thermal power sector, with gas-powered plants. The acquisition will increase Sapphire Fibres’ market presence in thermal power generation, while Mindbridge will mark its entry into the power generation industry through the proposed transaction.

The CCP’s analysis has determined that the relevant product market for this transaction is ‘Thermal Power Generation – Independent Power Producer’ within Pakistan. The acquisition will not lead to market dominance by the Acquirers, ensuring continued competition in the sector.

ISLAMABAD: The federal government is aiming to cut the electricity tariff by up to Rs10 after the termination of power purchase agreement with five independent power producers (IPPs) which it believes would save the national exchequer Rs411 billion.

“We will reduce the power tariff after mutual consultation with power generation companies,” Energy Minister Awais Leghari said while addressing a press conference after federal cabinet’s meeting in Islamabad.

Prime Minister Shehbaz Sharif, earlier in the day, announced that five IPPs have “voluntarily” agreed to cancel their power purchase agreements with the federal government, a move that will save the government Rs60 billion annually. 

The high cost of electricity has become a contentious political issue, with opposition parties leveraging public dissatisfaction to criticise the incumbent government’s handling of the energy sector and agreements with the IPPs.

The burden of high electricity tariffs falls disproportionately on the middle and lower-income segments of society, fueling public outrage and eroding trust in the government’s ability to manage the economy.

Analysts noted that a successful renegotiation with both local and international IPPs would drastically reduce tariffs, boost industrial competitiveness, and increase public trust in the government’s ability to effectively manage the economy.

Giving details regarding the development, the energy minister said that the government had surveyed to ascertain which plants are not needed anymore.

“We initiated talks with five IPPs and studied the power agreements,” he said, adding that they concluded with mutual consultation.

“The decision would provide Rs60 billion annual relief to the electricity consumers and cumulatively save Rs411 billion to the national exchequer,” Leghari said.

Hoping to achieve the target of reducing the power tariff by Rs 8-10 per unit in a few months, the minister said the government was undertaking various measures to ease the burden on the masses.

He also thanked Chief of Army Staff (COAS) General Asim Munir for his assistance in re-negotiating the agreements. “We will now look forward to working with remaining IPPs,” he added.

The energy minister also mentioned the establishment of an Independent System and Market Operator (ISMO), which he termed a “major win” for his ministry. “After its operationalisation, consumers will be able to buy electricity like shares,” he said.

A day earlier, the Cabinet Committee on Energy (CCoE) approved the establishment of ISMO, an independent multiplayer market, for power generation and purchase to create a competitive environment and gradually end the government’s role as a sole purchaser of electricity.

“We are creating an independent environment for the sale and purchase of electricity,” Leghari said, adding that the power purchasers will not be dependent only on the Central Power Purchasing Agency (CPPA-G).

Furthermore, he said the government was considering introducing a programme, which he said would increase the usage of electricity in winter. “In this regard, a decision will be made after taking all stakeholders into confidence,” he added.

Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb on Thursday highlighted a massive sales tax evasion worth Rs3.4 trillion out of a total Rs7 trillion tax theft in different sectors of the economy.

Aurangzeb was addressing a press conference along with the Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial to discuss a study conducted by FBR on sales tax evasion.

The study found that only 14% out of 300,000 manufacturers liable to register have done so, and many registered entities misreport turnover, claim excess input tax, and use fake invoices.

Sales Tax in Pakistan is collected through VAT mode, relying on businesses to collect tax from buyers. However, this trust has been breached on a massive scale, the minister said and shared findings from five sectors including iron and steel, cement, beverages, batteries, and textile.

He said malpractices were widespread, with most entities claiming excess input tax.

In the iron and steel sector, 33 large businesses, representing over 50% of total sales, evaded sales tax by claiming Rs29 billion in excess input tax, mainly through scrap metal and coal purchases.

Likewise, in the battery sector, six active cases, representing 99% of total sales, claimed Rs11 billion in excess input tax, primarily through lead purchases while in the cement sector, 19 active cases claimed Rs18 billion in excess input tax in FY23-24, mainly through coal purchases.

In addition, the beverages sector with 16 active cases, representing 99% of aerated water sales, claimed Rs15 billion in excess input tax, mainly through sugar, plastics, and services purchases.

In the textile sector, with 228 active cases claimed Rs169 billion in excess input tax, mainly through services, chemicals, coal, and packaging purchases.

Detailing steps to combat tax evasion, the finance czar said that the government has intensified enforcement measures, including arrests and criminal cases, resulting in a significant decrease in fake input tax claims in FY23-24.

However, massive evasion persists, and more measures are being planned to curb it.

He said that the apex taxation body has identified evidence of tax fraud in various sectors, including 11 battery sector cases, 897 iron & steel sector cases, and 253 beneficiaries of fake input claims on coal purchases.

Those involved face arrest and imprisonment of up to 10 years, heavy penalties, and fines.

On the occasion, the FBR chairman emphasised that input tax adjustment fraud was a serious issue, warning CFOs to refrain from signing incorrect returns, especially before the October 15 deadline. Those involved in tax evasion will face consequences.

Bank Alfalah to issue 150,000 free debit smart student cards for Virtual University students

A significant step towards modernizing e-banking solutions for students was taken as a delegation from Bank Alfalah Ltd visited the Virtual University of Pakistan’s Head Office in G-5, Islamabad. The visit marked the signing ceremony of agreements for the Integrated Payment Gateway (IPG) and Payroll systems.

The delegation from Bank Alfalah was warmly received by the Rector of Virtual University, Prof. Dr. Arshad Saleem Bhatti, and his team. During the ceremony, Rector, VU acknowledged the importance of these agreements, highlighting Virtual University’s commitment to embracing cutting-edge financial solutions. The new initiatives, particularly concerning IPG and Payroll, will streamline financial transactions and enhance ease for students and staff.

Discussions also focused on several potential collaborative efforts between Bank Alfalah and Virtual University, including the implementation of the 1-Bill system and the introduction of a debit card facility for students. These cards will not only serve as debit cards but also act as smart student ID cards, benefitting over 150,000 students. In addition, both parties explored opportunities for scholarships, sponsorships, and other avenues of collaboration to support students’ financial needs.

Dr. Arshad Saleem expressed enthusiasm for the long-term partnership between Virtual University and Bank Alfalah, emphasizing how these new facilities will enhance convenience for students, particularly in terms of fee payments. Students will now be able to pay their fees through the Integrated Payment Gateway, the Alfalah App, and Alfalah Transect.

The Virtual University delegation included: Prof. Dr. Arshad Saleem Bhatti, Rector, Mr. M. Ashraf Ali Khan, Director Finance, Prof. Dr. Ather Azim Khan, Registrar, Mr. Ehsan Puri, Director ICT, Dr. Faisal Tehseen Shah, Controller of Exams, Prof. Dr. Mohsin Javed, Dean, Mr. Aamir Hasan Khan, Director P&D, Mr. Muhammad Sajid Gill, Additional Director Finance

Representing Bank Alfalah Ltd were:Mr. Husnain Zaigham, Business Head North, Mr. Akmal Khattak, Regional Business Head, Mr. Umair Hassan, Area Manager, Mr. Bilal Munir, Regional Sales Manager, Employee Banking, Mr. Sohaib Malik, Senior Manager, Retail Cash Management, Ms. Mavera Salim, Branch Manager