Concerns Raised Over IPP Shutdowns, DISCOs’ Efficiency, and Cost of Electricity
ISLAMABAD: The Senate Standing Committee on Power, chaired by Senator Mohsin Aziz, convened at Parliament House on Monday to review the government’s restructuring plan for the National Transmission & Despatch Company (NTDC) and evaluate its impact on the power sector.
The Ministry of Power outlined its plan to divide NTDC into smaller units, aiming for enhanced efficiency and functionality. According to the ministry, the proposed restructuring involves maintaining NTDC engineers within the National Grid Company to oversee internal operations, while creating a separate entity for project execution and energy infrastructure development.
Senator Mohsin Aziz questioned the efficacy of past separations, such as WAPDA’s unbundling, and highlighted the lack of visible improvements for consumers. The power ministry secretary acknowledged transmission challenges but emphasized that transmission issues alone are not the sole impediments to sector performance.
The committee also addressed the recent closure of five independent power producers (IPPs) as of September 30, including one transfer to government ownership. A new pricing mechanism for Bagasse—a sugarcane byproduct—was introduced, aligning its rate with imported coal at Rs4,000 per 100 units and eliminating dollar-indexation. Detailed updates on these developments were requested for the next meeting.
Privatisation efforts for distribution companies (DISCOs), including IESCO, FESCO, and GEPCO, also came under scrutiny. The power ministry reported improved recovery rates and loss reductions but faced questions regarding the overall efficiency gains from privatisation. The next steps in privatisation will be guided by a financial advisor’s analysis.
The committee discussed governance issues within DISCOs, noting the absence of age limits for CEO and management appointments. The ministry confirmed ongoing board reappointments, with recommendations for completion within one month. Additionally, the committee called for a report on the removal of SEPCO’s executive engineer over corruption allegations, with recommendations expected in 15 days.
The meeting underscored concerns over electricity costs and sectoral reforms, urging WAPDA and other stakeholders to provide clarity on future strategies.
