ISLAMABAD: A fact-finding committee of the National Electric Power Regulatory Authority (Nepra) has uncovered significant irregularities in the coal procurement process for the Sahiwal Power Plant. The committee has recommended a series of corrective measures, including the establishment of an independent regulatory authority to safeguard electricity consumers from unjustified costs.
The four-member committee was formed last year following complaints from coal suppliers regarding an agreement between the Sahiwal Power Plant management and Awan Trading Company. Former Energy Minister and current Special Assistant to the Prime Minister, Muhammad Ali, had called for an investigation, while some aggrieved consumers escalated the matter to the Islamabad High Court, which subsequently directed Nepra to examine the complaints.
Key Findings and Concerns
The investigation highlighted concerns of collusion, inflated pricing, restrictive bidding, and procedural irregularities. However, the probe committee did not assign blame to the Sahiwal Coal Power Project’s management nor formally accuse them of misconduct.
Lack of Competition: The committee found that only a single qualified bidder participated in the procurement process, limiting competition and potentially driving up costs. A more inclusive bidding process with multiple eligible bidders could have enhanced transparency and efficiency.
Absence of Procurement Guidelines: Nepra has yet to establish formal guidelines for long-term coal procurement, a policy gap that the committee recommended addressing urgently.
Allegations of Prearranged Contracts: One contentious claim was that a coal supplier had prior knowledge of winning a bid, as a shipment from South Africa arrived almost immediately after the contract was signed. The committee urged stricter oversight and enhanced procedural transparency to prevent such occurrences in the future.
Discrepancy in Coal Prices: Coal was reportedly supplied to the Sahiwal plant at Rs75,000 per tonne, despite market rates being around Rs40,000 per tonne. However, the committee stated that the market report lacked clear evidence or a defined timeframe for price comparison, limiting further analysis.
Recommendations for Reform
Given these deficiencies, the fact-finding committee suggested:
Establishing an Independent Authority to regulate coal pricing, procurement, and sectoral transparency.
Issuing Clear Guidelines for long-term coal procurement, ensuring competitive bidding and inclusive eligibility criteria.
Enhancing Transparency in tender processes, explicitly justifying deviations from standard procurement practices, such as waiving advance notice requirements.
Strengthening the Role of the Central Power Purchasing Agency (CPPA), which oversees all power purchase agreements, to ensure fair pricing mechanisms.
The report underscores the need for urgent reforms in Pakistan’s coal procurement framework to enhance transparency, competitiveness, and consumer protection.
Story by Khaleeq Kiani
