ISLAMABAD: The Islamabad High Court (IHC) will investigate alleged irregularities in coal procurement for power plants, which have reportedly inflated electricity generation costs.
A group of petitioners filed an application questioning the coal procurement bidding process. They urged the court to direct the Ministry of Energy to conclude its inquiry, initiated after the power division’s letter on March 1.
The petitioners also seek directives for the National Electric Power Regulatory Authority (Nepra) to establish effective and transparent coal procurement guidelines for power producers.
During a hearing before Justice Miangul Hassan Aurangzeb, petitioners’ counsel Dr. Farogh Naseem argued that Nepra, which approves electricity tariffs, passes the Fuel Cost Components (FCC) burden onto consumers. He claimed that the coal procurement process is currently unregulated, leading to inflated costs.
Between July and December 2022, a preferred supplier reportedly provided coal at rates 85% higher than the market price due to the absence of guidelines. New regulations introduced in January 2023 encouraged competition, resulting in suppliers offering 11% to 15% discounts. However, the preferred supplier avoided these regulations by entering a long-term supply contract.
The petitioners request the court to nullify this long-term contract and instruct Nepra to establish proper procurement regulations and guidelines.
Story by Malik Asad
