ISLAMABAD: The Power Division is said to have failed to realise over a dozen priority tasks assigned by the Prime Minister Shehbaz Sharif, meant to bring improvement in the country’s poorly performing power sector whose circular debt is now over Rs 2.5 trillion, well-informed sources told Business Recorder.
The Power Division has not made any meaningful advancement on conversion of three Chinese imported coal-fired power plant, ie, Sahiwal power plant, Port Qasim power plant and Hub power plant to Thar coal.
Availability of Thar coal to Lucky coal power plant and conversion of imported coal-based Jamshoro power plant are also not in sight as of now.
Privatisation of Discos: PM directs a two-pronged plan
For removal of transmission constraints, Ministry of Planning has been directed to ensure the addition of the Battery Energy Storage System (BESS) project in PSDP for FY 2025-26. Power Division is making this project in its PSDP allocations for the FY 2025-26.
Prime Minister had also directed that privatisation of existing operating/semi-operating GENCOs (Including Nandipur and Guddu 747) be expedited. The deadline is January 1, 2026, the sources said, adding that progress on this task is also negligible.
On private participation in distribution companies, the sources said, in light of the recommendations of the committee on DISCOs, it was decided that IESCO, GEPCO and FESCO shall be offered for complete privatisation in phase-1 whereas LESCO and MEPCO and HAZECO shall be offered for complete privatization in phase-II.
SEPCO, HESCO, and PESCO shall be offered for long-term concession agreement to private sector.
TESCO and QESCO are to be retained for the time being under Government control considering their peculiar conditions. This has to be achieved by January 1, 2026.
The sources said Power Division and Privatisation Division are working to achieve the target but the Financial Advisors (FAs) have yet to be finalised.
The World Bank is extending financial assistance to the Government of Pakistan in this regard. On February 6, 2025, a meeting was held at the Ministry of Finance with the World Bank Mission to discuss support for private participation in DISCOs.
Prime Minister had directed the Power Division to take necessary steps for disposal of dead assets through open auction, with live media coverage by December 31, 2024. This task has also not been achieved.
In another task, Power Division had been directed to ensure implementation of GENCO employees transition plan including absorption of technical cadre employees in DISCOs as per need assessment and voluntary separation scheme for the remaining staff through sale of dead assets by August 31, 2024. This issue is unresolved as of now. Wapda Hydroelectric Union has requested the government to adjust GENCOs employees in NTDC.
Prime Minister had also directed Power Division that out of strategic allocation of 2400 MW, only 1 X 600 MW solar power plant shall be taken up/offered for investment with KSA. Future generation expansion plan shall be accordingly revised to reflect the above decision by July 31, 2024.
A representative of Power Division recently informed a meeting held in Commerce Ministry that 600 MWp Solar Power Project has been allocated to Saudi Arabia’s company.
Prime Minister had also accorded approval in principle to a transition plan for progressive shifting of captive units to National Grid, assessment by DISCOs and implementation by July 31, 2024. This decision has been implemented through a different mechanism after IMF’s consent. On this account gas rates have been increased for the CPPs to Rs 3500/ MMBTU from Rs 3,000/MMBTU in addition to five per cent levy meant to compel CPPs to shift to national grid.
Another major task about operationalisation of competitive electricity market and determination of wheeling charges and approval of commercial code by September 30, 2024 has not been realized.
The sources said, finalization of recommendations by the committee for optimal wheeling charges and its modalities (including gradual reduction of stranded cost, annual cap and availability of surplus capacity in the system) and approval of Federal Cabinet by September 30, 2024 has also not been realized due to which the private sectors intent to sign B2B contracts to get cheap electricity, remains unmaterialized.
Balochistan Minister for Power, Minister for Commerce, and Secretary Power were to engage with the Government of Balochistan to finalize the roadmap for solarization of agriculture tube wells (where possible) and develop proposals for remaining tubewells by August 32, 2024. The government has solarized electricity tubewells in Balochistan.
However, the issue of net metering is still unresolved as the Power Division wants to slash buyback rates by Rs 10 per unit from existing Rs 20 per unit.
The issue of recovery from AJK and FATA also remains unresolved. A committee under the Minister for Defense had taken up the issues of under recovery/payment with Governments of AJ&K and KPK and was to submit recommendations for amicable settlement of issues by July 31, 2024.
Copyright Business Recorder, 2025
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