The federal government has decided to restructure the National Transmission and Despatch Company (NTDC) by splitting it into two entities: National Grid Company Projects (NGC Projects) and National Grid Company Assets (NGC Assets).
This decision follows ongoing concerns about inefficiencies, delays, and mismanagement within the NTDC.
The NTDC, which was formed after the unbundling of WAPDA in 1998, has been responsible for constructing and maintaining transmission lines and grid stations across Pakistan. Despite its expansion into advanced technologies like 765kV and ±600kV HVDC, the company has struggled with outdated business processes, unresponsive management, and inefficient project execution. Projects that should have been completed in 2-3 years have frequently been delayed by 7-8 years, leading to significant financial losses.
Amid growing concerns about corruption and poor performance, the Senate Standing Committee on Power has repeatedly criticized NTDC’s leadership for alleged malpractices, including awarding subcontracts to companies with ties to senior officials.
Furthermore, with provinces establishing their own transmission companies, NTDC’s monopoly is diminishing, and its income is expected to shrink.
To enhance functional efficiency, the NTDC had already divested its market operator function in 2015, resulting in the creation of the Central Power Purchasing Agency-Guarantee (CPPA-G). More recently, the Cabinet approved a proposal to establish an Independent System and Market Operator (ISMO), which will merge NTDC’s system operator function with CPPA-G’s market operator role.
In April 2024, Prime Minister Shehbaz Sharif tasked a committee, including the Ministers for Economic Affairs and Power, and power sector expert Dr. Fiaz Ahmad Chaudhry, to conduct an in-depth review of NTDC and propose restructuring options. The committee presented its findings to the Prime Minister in September 2024, recommending the creation of two new entities.
The first, National Grid Company Projects (NGC Projects), will take over project preparation, implementation, procurement, supply chain, and revenue functions, accounting for over 80% of NTDC’s budget. The second, National Grid Company Assets (NGC Assets), will focus on transmission service provision and asset management.
The Prime Minister approved these proposals, and the Power Division will now submit the restructuring plan to the Federal Cabinet for final approval. The plan includes incorporating NGC Projects as a state-owned enterprise and renaming NTDC as NGC Assets after completing all formalities with the Securities and Exchange Commission of Pakistan (SECP).
Additionally, a recent IMF staff report noted that Pakistan is finalizing the restructuring of NTDC into three entities: the Independent System Operator and Market Operator (ISMO), the Power Transmission Infrastructure Development Company (PTIDC), and the National Transmission Maintenance Company (NTMC). This restructuring is expected to increase the independence and oversight of transmission and market operations, with full implementation slated for completion by December 2024.
