National Power Parks Management Company uncertain about future of Rousch Power Plant

ISLAMABAD: National Power Parks Management Company Limited (NPPMCL) is reportedly facing a confusing situation regarding the future course of action for the 450 MW Rousch Power Plant, sources told Business Recorder.

Under the Negotiated Settlement Agreement (NSA), the government has taken over the plant from former Commerce Minister Abdul Razak Dawood. As per the NSA with M/s Rousch Power, the following was agreed in addition to the outlined principles: (i) being on a BOOT basis, the company will transfer the complex to the Government of Pakistan or its designated entity at one USD, to be paid in equivalent PKR at the prevailing exchange rate; (ii) the company will be paid Rs 5.5 billion in lieu of the OFME period due to early termination; and (iii) the company will be paid Rs 2.8 billion for preservation of the complex until its transfer to the Government of Pakistan or its designated entity. Sharing the latest update, sources said the Board of Directors of NPPMCL, in its 103rd meeting held on October 17, 2025, deliberated on the future course of action for taking over the Rousch Power Plant in compliance with the Federal Cabinet’s decision of October 10, 2024. During the discussions, the Board noted the following points: (i) expenditure of Rs 563.88 million incurred to keep the plant in preservation mode from January 1 to June 30, 2025; (ii) a budget provision of Rs 368.83 million for maintaining the plant in standstill mode from July 1 to December 31, 2025; (iii) costs incurred so far by NPPMCL on government directions have not been reimbursed despite assurances; (iv) the valuation exercise of the Rousch Power Plant has been completed by the consultant pursuant to government directions; and (v) the transfer of title of the land/site and complex/machinery from Rousch (Pakistan) Power Limited to NPPMCL is underway and is expected to be completed during the current month (November 2025), as per the Board’s target.

Transfer of power complex to GoP: No post-Dec 31, 2024 liability, Rousch warns NPPMCL

According to sources, in view of this background, the Board concluded that incurring further expenditure on the Rousch Power Plant beyond December 31, 2025 is not advisable in terms of financial propriety.

The Board directed the management to seek clear directions from the Power Division, Government of Pakistan whether it should be done through the Privatisation Commission of Pakistan or by NPPMCL itself. Legal advice obtained by the company indicates clearly that any sale can only be undertaken through the Privatisation Commission, or by the company itself only if the Commission grants a waiver.

The relevant legal provision is Section 2(i) of the Privatisation Ordinance, 2000, which—after the 2002 amendment—defines privatisation as “a transaction by virtue of which any property, right, interest, concession or management thereof is transferred to any person from the Federal Government or any enterprise owned or controlled, wholly or partially, directly or indirectly, by the Federal Government.”

The proviso states that a transaction will not be considered privatisation if its value is below the prescribed threshold or if the Commission has exempted it from the application of the Ordinance.

This definition covers any sale or disposal of the Rousch Power Plant unless the Privatisation Commission issues a waiver specifically for Rousch or generally for unviable assets owned directly or indirectly by the Federal Government.

NPPMCL further highlighted that O&M arrangements and the incurrence of expenditure beyond December 31, 2025 will become necessary if the disposal of the plant and machinery is delayed.

The Federal Government has also been informed about interest shown by NTDC/NGC in utilising the generators of the Rousch Power Plant as synchronous condensers for grid stability to add MVArs. A letter has been sent to the Chairman of NGC seeking confirmation of their interest.

After explaining the background, NPPMCL has sought necessary directions and guidance from the Government, particularly regarding the mode of disposal of the Rousch Power Plant.

Copyright Business Recorder, 2025