A fact-finding committee formed by the National Electric Power Regulatory Authority (Nepra) has identified serious flaws in the coal procurement process for power generation at Sahiwal Coal Power Plant and recommended corrective measures, including the establishment of an independent authority to regulate coal pricing and procurement, Dawn reported.
The four-member committee was constituted last year following complaints from coal suppliers about an agreement between the Sahiwal plant’s management and Awan Trading Company. The probe was initiated on the direction of Muhammad Ali, former energy minister and now Special Assistant to the Prime Minister (SAPM), while the Islamabad High Court (IHC) had also instructed Nepra to review the allegations.
Bidders alleged collusion, inflated prices, restrictive bidding practices, and procedural irregularities in the procurement process. However, the investigation did not assign responsibility or formally accuse the Sahiwal Power Project’s management of misconduct.
The 16-page report prepared by the committee stated that the bidding process lacked competition, as only one qualified bidder participated. The committee suggested that greater participation from multiple bidders could have improved transparency and resulted in more competitive pricing.
Despite multiple reminders from Nepra, bidders failed to provide evidence to substantiate their allegations. The committee also noted the absence of formal Nepra guidelines for long-term coal procurement, urging the regulator to develop a structured framework to prevent similar issues in the future.
Another concern was the modification of bidding documents to remove the requirement for a 60-day notice, which bidders claimed restricted competition. The Sahiwal plant’s management justified the change by citing low reliability of coal suppliers and the need to meet energy production targets.
The report also highlighted concerns over price discrepancies, with allegations that coal was procured at Rs75,000 per tonne, while market rates stood at Rs40,000 per tonne. However, the probe team noted the lack of market data to verify these claims, preventing further analysis.
To address the deficiencies in procurement, the committee recommended that the government prioritize the establishment of an independent coal pricing and procurement authority. Additionally, Nepra was urged to introduce clear guidelines to ensure competitive bidding and transparent procurement practices.
The report emphasized the need for greater procedural transparency in coal procurement, stating that future tenders should explicitly justify any deviations from standard practices, such as waivers on advance notice requirements, to prevent concerns over bias or favoritism.
It also pointed out the critical role of the state-owned Central Power Purchasing Agency (CPPA) in regulating power purchases and contract pricing, highlighting the need for stricter oversight in coal procurement processes moving forward.
