🔳 Millions of Karachi’s citizens live with a shortage of clean drinking water and remain at the mercy of the tanker mafia. Yet on the coast of the same city, hundreds of thousands of gallons of water are processed every day through expensive desalination and demineralisation systems to feed the boilers of the Port Qasim Coal Power Plant, because seawater is harmful for the plant.

Look at the priorities of our governments. Citizens are desperate for every drop of water, while sweet water is being produced at the cost of gold for a power plant and its staff. And the cost of that water is ultimately being added to the electricity bills of the same thirsty citizens.

It is beyond understanding why the people are being charged for water they never drank.

In energy matters, Khawaja Asif was the Minister for Water and Power. The PPA, tariff, generation licence and political oversight of the relevant energy institutions were all linked to this ministry. At the policy level, it was the government of Prime Minister Nawaz Sharif that decided to give national priority under CPEC to this imported coal-based power plant.

In financial year 2023-24, the plant was able to utilise only around 18 percent of its total capacity. Yet during the same period, Port Qasim Electric Power Company was paid approximately Rs 120.37 billion in capacity payments.

Its performance did not improve in financial year 2024-25 either, and utilisation remained around 25 percent. In just one quarter, the plant’s capacity payment claims reached almost Rs 26.95 billion, which comes to nearly Rs 108 billion on an annualised basis.

According to recent reports, during financial year 2025-26, the outstanding dues of this project have crossed Rs 90 billion, which still remain payable.

This decision appears to be more than a purely business move. It is also a signal of declining confidence in Pakistan’s investment environment.

Changing policy alone will no longer be enough. The faces running this system will also have to change. Otherwise, as long as the same old decision-makers remain in place, no policy will be able to end this crisis.

🔲 Public Investigative Series | Episode 36

Topic: How Can Pakistan’s Electricity System Be Fixed?

Title: Port Qasim Coal Power Plant, An IPP, A Story

🔺 When institutions avoid providing facts, reaching the truth becomes the responsibility of the people.

Written and researched by Syed Shayan

Port Qasim Power Plant is a coal-fired thermal power plant. To operate the plant, cool the coal and run its boilers, it requires hundreds of thousands of gallons of fresh water every day.

The location of the plant at Port Qasim, Karachi, right on the seafront, was selected to reduce the cost of coal transportation. But the planners ignored one basic question: where would the fresh water needed to run the plant come from?

Karachi itself faces a severe water shortage, so obtaining water from the city was never easy. The solution chosen for this problem surprised even international experts.

To meet the plant’s requirement, an extremely expensive desalination plant had to be installed to convert seawater into usable fresh water. This added tens of millions of dollars in extra cost.

More than that, disputes over water supply lines created situations several times where emergency fresh water supply for the plant reportedly had to be arranged through water tankers.

A study of reports by international think tanks, environmental experts and economic analysts on the Port Qasim Coal Power Plant brings forward six deeply alarming and disturbing points about this project, which are being discussed globally.

1- Dependence on imported coal and the destruction of the national treasury

According to the international energy think tank IEEFA, the most disturbing fact about this power plant is its dependence on imported coal.

At the beginning of the project, tall claims were made about cheap electricity. But rising coal prices in the international market and the continuous depreciation of the rupee turned this into one of the most expensive power plants in Pakistan’s history.

To run this plant, Pakistan has to send precious dollars abroad to purchase expensive coal. This not only places severe pressure on foreign exchange reserves, but this heavy import cost has also become one of the major causes behind the uncontrollable monster of circular debt.

The irony is that despite the existence of massive domestic coal reserves in Thar, capable of lasting for centuries, Pakistan installed a complex plant that can run only on foreign coal. This is a serious mockery of the national economy.

2- A water crisis on the seafront

Port Qasim Power Plant is a coal-fired thermal power plant. To operate the plant, cool the coal and run its boilers, it requires hundreds of thousands of gallons of fresh water every day.

The location of the plant at Port Qasim, Karachi, right on the seafront, was selected to reduce the cost of coal transportation. But the planners ignored one basic question: where would the fresh water needed to run the plant come from?

Karachi itself faces a severe water shortage, so obtaining water from the city was never easy. The solution chosen for this problem surprised even international experts.

To meet the plant’s requirement, an extremely expensive desalination plant had to be installed to convert seawater into usable fresh water. This added tens of millions of dollars in extra cost.

More than that, disputes over water supply lines created situations several times where emergency fresh water supply for the plant reportedly had to be arranged through water tankers.

3- The contradiction between supercritical technology and the destruction of mangroves

Globally, the second major negative point about this project was its environmental hypocrisy.

The Port Qasim Power Plant was presented internationally as a project based on “supercritical” technology, which was claimed to cause relatively less pollution.

But in practice, for the construction of the same plant and its coal berth, old and valuable mangrove forests along the Port Qasim coastline were ruthlessly cut down.

It must be remembered that mangroves do not grow on dry land like ordinary trees. They grow in marshy and muddy coastal areas, where seawater regularly comes and goes.

These forests protect the coast from cyclones, tsunamis, erosion and strong waves. Fish, crabs and birds also breed in these forests. That is why mangroves are called the natural shield of the coastline.

International environmental organisations, including institutions such as IUCN, strongly criticised this contradiction. On one side, there is talk of “green” and “clean” energy. On the other side, the natural shield that protects Karachi’s coastline from tsunamis, sea storms and erosion is being destroyed by our own hands.

The hot water released from the plant and coal particles entering the sea harm local fish and marine life. The greatest impact falls on local fishermen, whose livelihood is already under severe pressure.

4- The geographical blunder of coal ash dumping

Another major flaw that faced strong international criticism was the poor arrangement for disposing of coal ash produced by the plant.

At Port Qasim, the direction of the wind generally moves from the sea towards land, meaning towards Karachi city. Experts warned that because open ash dumps are located near the coast, strong sea winds can carry this toxic ash into densely populated areas of Karachi. This is a major human and environmental crime.

The geographical blunder of coal ash is one of the most serious aspects of the project’s design and location selection. Environmental experts see it as a major example of Pakistan’s weak planning.

5- The trap of take-or-pay and capacity payments

This plant operates under one of the most controversial structures in Pakistan’s power sector.

Under the agreement, even if the Government of Pakistan does not purchase a single unit of electricity from this plant, and even if the plant remains shut, the people of Pakistan still have to pay billions of rupees every month to the plant owners in the form of capacity charges.

Think tanks describe this as an economic leech, sucking the blood of the public even when the plant is not running.

6- Carbon emissions and global climate lock-in

At a time when the world is shutting down coal-fired power plants and moving towards green energy such as solar and wind, Pakistan has locked itself into a 30-year-long agreement with this plant.

International think tanks say this plant releases millions of tons of carbon dioxide and toxic sulphur into the atmosphere every year, contributing to rising temperatures and heatwaves in Karachi.

Pakistan is among the countries most affected by climate change at the global level. Yet this plant has become a long-term trap through which the country is damaging its own environment with its own hands, and it cannot easily escape this trap before 30 years.

It should be noted that the actual company operating the Port Qasim Coal Power Plant is Port Qasim Electric Power Company Private Limited, commonly known as PQEPC.

China’s PowerChina reportedly holds 51 percent shares in this company, while 49 percent shares are said to be held by Al Mirqab Capital, the investment institution of Qatar’s former Prime Minister Sheikh Hamad bin Jassim.

This is a 1,320 MW imported coal-based power plant and is included among the early energy projects of CPEC. The plant consists of two units, each having the capacity to generate 660 MW of electricity.

To be continued in the next episode.