Consumer groups have repeatedly raised concerns over coal procurement practices by independent power producers (IPPs), including during public hearings. The Power Division and the National Electric Power Regulatory Authority (Nepra) have now also flagged inefficiencies in coal purchasing and their financial impact on electricity consumers.
The issue came into sharper focus after a recent competitive tender for coal supplies to the 660-megawatt state-owned Jamshoro Power Plant secured a discount of $7.12 per tonne from a Karachi-based supplier. This compared with discounts of only 20 to 50 cents per tonne secured under some IPP contracts.
The Power Division said on Tuesday that it had identified “significant inefficiencies” in the procurement of imported coal by power plants. It said new policy guidelines had been issued for corrective measures that could save the national exchequer up to Rs380 million annually.
Nepra had earlier raised concerns over coal procurement by Port Qasim Electric Power Company (PQEPC) under a six-year supply agreement. The contract offered discounts ranging from $0.20 to $0.50 per tonne, based on estimated coal prices.
The regulator questioned the evaluation method, saying such an approach had not been seen in tenders by other power plants and was not justified because estimated coal prices could change in the future.
Nepra also noted that PQEPC had advertised the tender only in China rather than approaching a wider pool of potential suppliers. It said including discounts as a key factor in bid evaluation could have resulted in more competitive offers.
The regulator further observed that the plant had failed to disclose an existing long-term coal supply agreement during two separate discussions with Nepra, leading to proceedings over alleged misstatement or non-disclosure of information.
Following its March 2026 fuel price adjustment decision, Nepra directed PQEPC to conduct fresh bidding for a long-term coal supply agreement within three months.
However, officials said the company subsequently procured around 1.2 million tonnes of coal, sufficient for nearly a year, shortly before the new tender. The procurement reportedly secured a discount of around $0.50 per tonne, compared with the $7.12 discount obtained by Jamshoro Power Plant.
Officials estimated that the difference in discounts represented a financial gap of around $8 million. They warned that the impact could be significantly higher if similar procurement practices were being followed by other IPPs.
The Power Division said the procurement issues were identified during a series of meetings chaired by the power minister, where officials examined actual procurement data, contractual arrangements and prevailing market practices.
Pakistan has a coal-fired power generation fleet of around 5,280MW that relies wholly or partly on imported coal. This includes the 1,320MW plants at Port Qasim, Hub Power and Sahiwal, along with Lucky and Jamshoro power plants, which can also operate on imported coal.
The division said coal prices for IPPs are linked to international benchmarks such as the API-4 index, but the final cost paid by each plant also depends on the discount negotiated with suppliers.
