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ISLAMABAD: Independent power producers (IPPs) operating on imported coal have been found imposing an additional burden on electricity consumers through opaque and inefficient coal procurement practices, with the cost ultimately passed on through monthly fuel price adjustments (FPAs).
While consumer groups have been raising concerns over such practices at various forums, including public hearings, the power division and the National Electric Power Regulatory Authority (Nepra) have now also pointed to inefficiencies in coal procurement and their financial impact on consumers.
The issue gained prominence after recent competitive bidding for coal supply to the 660MW state-owned Jamshoro Power Plant attracted a discount of $7.12 per tonne from a Karachi-based supplier compared to discounts of only 20 to 50 cents per tonne in some contracts involving IPPs.
“The power division has identified significant inefficiencies in the procurement of imported coal by power plants,” an official statement said on Tuesday, adding that fresh policy guidelines had been issued “for corrective action that could save the national exchequer up to Rs380 million annually”.
