ISLAMABAD: The federal and Khyber Pakhtunkhwa governments are at loggerheads over the fate of two stalled hydropower projects, with the province demanding their revival and inclusion in national power plan while the centre warning they would push up electricity prices and burden consumers.
The dispute came to the fore during a meeting of the Senate Standing Committee on Power, chaired by Senator Mohsin Aziz, as lawmakers examined the 207MW Madyan and 88-megawatt Gabral projects. Both were previously part of the Indicative Generation Capacity Expansion Plan (IGCEP) but have been dropped by the federal government. KP’s Special Assistant on Energy told the committee that Rs5 billion had already been spent on land acquisition and that both physical and financial progress had been made. “These are our only major resource-based projects. If they are stopped, it will be a grave injustice,” Senator Mirza Muhammad Afridi said, calling for their immediate reinstatement.
Federal Minister for Power Awais Ahmad Leghari countered that KP officials had misrepresented the Council of Common Interests (CCI)-approved power policy by selectively citing one clause. He warned that adding such high-cost schemes could raise power tariffs by Rs6 per unit by 2034. Leghari said the Power Division had removed 8,000 to 10,000MW of projects from the IGCEP — including several under the China-Pakistan Economic Corridor (CPEC) — to prevent expensive generation from burdening the public.
He added that the government had terminated five independent power producer (IPP) contracts and renegotiated others, yielding projected savings of Rs3.4 trillion over the next four to five years.
“This year alone, we have reduced losses of distribution companies by Rs191 billion,” Leghari told the senators, while admitting electricity theft remained a major challenge. He said the government had achieved its target of shifting toward a competitive electricity market, freeing it from the obligation of purchasing power under long-term contracts.
The panel also discussed the tariff structure for protected consumers. Aziz urged the Power Division to review the policy and introduce multiple slab rates to shield households from sudden price hikes. Secretary Power Division Fakhar-e-Alam said a reassessment was underway, with subsidies currently available to users consuming up to 200 units per month.
Lawmakers further raised the issue of unpaid Net Hydel Profit (NHP) to provinces. NEPRA officials said payments were being made, but KP representatives argued the amounts were too low and arrears were mounting.
The committee recommended NEPRA clear the backlog and release at least Rs5 billion monthly to the province, directing that a follow-up meeting be held within a week.
On wheeling charges, Leghari said the Cabinet had approved replacing the standard Rs28 rate with a base rate of Rs12, and the proposal was now with NEPRA for final approval. Aziz also flagged the high returns for some IPPs — reportedly up to 100 percent — which NEPRA attributed to dollar-linked contracts. The panel sought the last five balance sheets of these plants for scrutiny.
