🔲 Public Inquiry Series | Episode 19
Topic: How Can Pakistan’s Electricity System Be Fixed
(On what basis were 5 IPPs shut down)
🔺 When institutions refrain from providing facts, the responsibility to uncover the truth rests with the public.
Research & Writing: Syed Shayan
Five IPPs Have Been Terminated Before Maturity. Know the Facts.
Many readers have asked whether the IPPs whose contracts were nearing completion were renewed or not.
In response, I am currently presenting details of five IPPs with a combined capacity of approximately 2400 MW, whose contracts were terminated prematurely in October 2024 by the federal cabinet through mutual agreement.
• HUBCO more than 1200 MW
• Lalpir 362 MW
• Saba Power 136 MW
• Rousch Power 450 MW
• Atlas Power 224 MW
The reality is that some of these plants were already non operational or functioning at minimal capacity, some were only a few months away from contract expiry, while others produced electricity at such high costs that operating them was not considered economically viable. In effect, some were largely retained to receive capacity payments.
According to available information, the government paid approximately PKR 72 billion to these five companies to terminate their contracts.
1. Lalpir Power Limited
This plant is associated with the Nishat Group. Its ownership includes Mian Muhammad Mansha and family, particularly Mian Hassan Mansha, who is part of the board of directors. The contract was originally valid until 28 November 2028, but it was terminated early on 1 October 2024. Approximately PKR 12.8 billion was paid, primarily covering outstanding capacity charges and other dues. Other IPPs of this group, including Nishat Power Limited, Nishat Chunian Power Limited, and Pakgen Power Limited, are still part of the system.
2. Hub Power Company Limited
This was Pakistan’s largest and oldest IPP, established under the 1994 policy. It is owned by the Habibullah Khan family and their Mega Group. Its contract was originally set to continue until March 2027 but was terminated early in October 2024. Around PKR 36.5 billion was paid as part of the settlement, mainly for outstanding capacity and energy charges. Other major projects of this group that remain in the system include Hubco Narowal Power Limited, Hubco Thatha Power, Thar Energy Limited, ThalNova Power Thar, and others whose contracts were not terminated.
3. Saba Power Company Limited
This was a relatively smaller IPP established under the 1994 policy. It is associated with Nadeem Babar and his partners, previously linked with El Paso and Coastal Saba. The contract was originally expected to run until around 2025 but was also terminated in October 2024. Approximately PKR 1 billion was paid, mainly for outstanding capacity charges and other dues. The plant was already operating at limited capacity or was non operational, raising questions about the actual financial benefit of its termination.
4. Rousch Power Group
This was a gas based IPP. Key stakeholders include the Dawood Group associated with Abdul Razak Dawood, Altern Energy Limited, and Power Management Company Limited, with shareholding links to Descon, Olayan Group, and Crescent Group. The contract was expected to run until around 2032 but was terminated early in October 2024. Approximately PKR 15.5 billion was paid, largely comprising outstanding capacity payments. The government presented this case as a major achievement due to the heavy capacity payment burden. As it operated under a BOOT model, the plant is expected to be transferred to the government.
5. Atlas Power Limited
This plant was established under the 2002 policy. Its primary ownership lies with the Atlas Group and the Shirazi family, particularly through Shirazi Investments Private Limited holding over 92 percent shares. Its contract was also terminated before maturity, and approximately PKR 6 billion was paid, mainly covering outstanding capacity charges and other liabilities. Like other IPPs, it was removed from the system through a lump sum settlement.
(To be continued in the next episode)
