Indepe­ndent power producers found overcharging users through costly coal procurement

According to Dawn, independent power producers using imported coal have been found to add costs for electricity users through opaque and wasteful buying, passed on via monthly fuel price adjustments. Consumer groups had raised such concerns at public hearings, and now the power division and Nepra have also flagged the inefficiencies.

The row intensified after a Jamshoro coal tender drew a $7.12 per tonne discount from a Karachi supplier, far above the 20 to 50 cents seen in some IPP contracts. Nepra faulted the Port Qasim plant for publishing its tender only in China and for not disclosing an existing long-term supply deal during two discussions with the regulator.

Officials said the Port Qasim plant bought about 1.2 million tonnes of coal after the March 25 order, enough for nearly a year, just before a new tender. Its discount was around $0.50 per tonne, which officials said left a gap of roughly $8 million against the Jamshoro deal. The power division said new guidelines could save the national exchequer up to Rs380 million annually. Hub Power is one of three major 1,320MW coal plants named by the division, within a fleet of about 5,280MW.