ISLAMABAD: The Power Division has proposed a Public Sector Development Program (PSDP) of Rs 392.5 billion for various development projects within its entities for fiscal year 2025-26. This information was presented to the National Assembly Standing Committee on Power, chaired by Muhammad Idrees.
Additional Secretary of the Power Division, Syed Imtiaz Hussain Shah, briefed the Committee, stating that out of the proposed Rs 392.5 billion, Rs 1.5 billion is allocated for the Power Division, Rs 10 billion for the Jamshoro Power Company Limited’s imported-coal fired power plant, Rs 315.7 billion for NTDC, Rs 6.988 billion for HESCO, Rs 10.146 billion for MEPCO, Rs 409 million for SEPCO, Rs 7.308 billion for QESCO, Rs 13.779 billion for PESCO, Rs 6.055 billion for LESCO, Rs 20.522 billion for IESCO, and Rs 61.92 million for PPIB.
However, the Ministry of Planning, Development, and Special Initiatives has instructed the Power Division to prioritize its proposed projects for the PSDP 2025-26, indicating that the allocation will not follow the original wish list.
PSDP 2024-25: Rs628.891bn development funds released in 7 months
According to the documents shared with the Committee, the total cost of the PSDP 2024-25 was Rs 1.197 trillion, which included foreign loan of Rs 691.8 billion. As of June 30, 2024, the total expenditure was Rs 455 billion, with a carry-forward amount of Rs 742 billion.
The allocation for FY 2024-25 was Rs 150.269 billion, which included Rs 61.578 billion in foreign loans, Rs 88.69 billion in rupee cover, Rs 43.012 billion from the government (grant + CDL), and Rs 45.679 billion from NTDC’s own sources.
The Chairman of the Standing Committee emphasized that he would thoroughly review all the proposed projects before granting approval for the PSDP.
On the issue of overbilling of Rs 7.8 million units in Kasur by LESCO, the Committee formed a sub-committee, headed by Rana Muhammad Hayat, to investigate the matter on a case-by-case basis.
Rana Hayat expressed concern that, while the government is revising or terminating IPP contracts, electricity prices continue to rise, making it difficult for him to defend the situation to the public as a treasury MNA.
Secretary of the Power Division, Dr. Fakhray Alam Irfan, informed the Committee that LESCO incurred a financial loss of Rs 82 billion last year, and the company has been directed to reduce the loss to Rs 40 billion.
Dr. Irfan also provided details of the revised and terminated contracts with IPPs. He mentioned that the revision of contracts for Gencos will be completed within a week, after which these will be presented to the Cabinet for final approval. The next step will involve wind and solar projects.
In response to a question, Dr. Irfan clarified that the government had pointed out violations by IPPs and made it clear that they should resolve the issues through negotiations or face a forensic audit. He added that while one or two IPPs proposed resolving the issue through arbitration, the government did not agree to this approach.
Dr. Irfan dismissed the notion that IPPs were pressured into revising their contracts, noting that the Power Minister had met with the British High Commissioner on this matter. He also stated that electricity rates for industrial consumers have been reduced by Rs 10-12 per unit since June 2024, while the tariff for domestic consumers has been cut by Rs 4 per unit.
Additionally, he mentioned ongoing talks with the IMF regarding the removal of taxes from electricity bills, but the IMF has yet to agree to the proposal. He also clarified that furnace oil-fired power plants have either been shut down or are scheduled to be phased out within the next three to four years, to be replaced by cheaper electricity sources, including ongoing hydroelectric projects.
He assured the Committee that future generation will exceed demand in the coming years, stating that they are forecasting electricity generation for the next decade.
Mustafa Kamal, MQM MNA, raised the issue of feeders in Karachi being completely shut down instead of PMTs, which has led to K-Electric losing its good-paying consumers. He suggested that the Power Division must break the monopoly of Discos, including KE, so consumers have the option to purchase electricity from any company.
Secretary of the Power Division explained that the government will soon launch the Competitive Trading Bilateral Contract Market (CTBCM) after resolving issues related to wheeling charges.
He also mentioned another upcoming project where consumers will be able to take a photo of their own meters and upload it into the system. Power Division acknowledged that this is an ongoing issue, being addressed through the installation of smart meters, with a pilot project already underway in IESCO.
Dr. Irfan further stated that the government is planning to establish an 800-1000 MW battery backup system to store wind electricity, ensuring that fluctuations in wind generation do not affect the overall system.
The World Bank, Asian Development Bank, and Islamic Development Bank will provide $500 million in financing for this project.
Copyright Business Recorder, 2025
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