Underutilization of HVDC line: AGP holds NGC responsible for Rs86.5bn overcharge

ISLAMABAD: The Auditor General of Pakistan (AGP) held the National Grid Company (NGC), formerly the National Transmission and Despatch Company (NTDC), responsible for burdening electricity consumers with an additional Rs 86.5 billion due to the underutilization of the Matiari–Lahore ±660 kV HVDC Transmission Line.

Under the “Sales and Purchase of Transmission Services” agreement, the purchaser is required to pay for contracted capacity from the Commercial Operations Date, irrespective of actual use, under the “take-or-pay” arrangement. Clause 10 of the Transmission Line Project (2015) further stipulates that power system operations — including system security, voltage control, and generation dispatch — fall solely under NTDC/NPCC’s responsibility.

A performance audit of the transmission line (up to FY 2023–24) revealed that actual utilization averaged just 47.55% of its technical capacity.

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Based on 80 percent of the 4,000 MW design capacity with 98.5 percent availability, the line remained under-utilized by 41.02 billion kWh. This inefficiency triggered an avoidable financial liability of Rs 86.456 billion, ultimately passed on to consumers.

Monthly data showed significant fluctuations — ranging from only 17 percent utilization in November 2021 to a peak of 62 percent in August 2023. Although utilization improved somewhat during seasonal peak demand months, the line consistently operated far below capacity.

The AGP attributed the losses to NTDC/NPCC’s failure to align generation dispatch and system demand with the contracted 4,000 MW capacity. Despite commissioning this strategic project, no integrated planning mechanism was established to ensure its optimal use.

As a result, idle capacity payments were made without any corresponding benefit, undermining the project’s value and highlighting weak operational accountability.

When confronted in July 2025, NTDC management stated that the Power Division had already submitted a high-level inquiry report to the Prime Minister’s Office under the subject “Non-utilization of Full Capacity: HVDC Matiari–Lahore Transmission Line.” The AGP, however, rejected this response as unsatisfactory, noting that no substantive justification had been provided.

The audit recommended: (i) submission of the inquiry report to audit authorities; (ii) a clear explanation of the reasons behind under-utilization; and (iii) introduction of robust system-wide planning protocols to prevent similar financial losses in any future take-or-pay projects.

Copyright Business Recorder, 2025