Coal Procurement: Nepra introduces reforms to save Rs380 million annually

The reforms follow meetings chaired by Energy Minister Awais Leghari, where officials reviewed coal purchase data, contracts and prevailing market practices.

The Power Division said the government has started reforming the import and delivery system for coal used by power plants.

Under the new guidelines, power plants must follow the principle of the best available discount. A plant cannot buy coal from a supplier at a lower discount if the same supplier offers a better discount under another contract.

The Power Division found major differences in discounts offered by the same global supplier to different power plants. Discounts ranged from 25 cents to $7.12 per tonne.

Officials also found that some backup supply contracts received higher discounts than central contracts. Despite these agreements, some plants did not purchase coal from suppliers offering better discounts.

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The Power Division said such practices increased procurement costs. Electricity consumers ultimately carried these additional costs through power tariffs.

Awais Leghari said data analysis had helped the government identify weaknesses in the existing procurement system. He said authorities were now addressing those gaps through regulatory and policy measures.

The minister said the savings from the reforms would directly benefit electricity consumers. He added that the government’s intervention aimed to improve transparency and efficiency rather than interfere in commercial decisions.

Leghari stressed that consumers ultimately bear the cost of fuel used for power generation. He said coal procurement must therefore remain efficient, competitive and transparent.

The new guidelines aim to close procurement loopholes, secure better discounts from international suppliers and reduce costs for electricity consumers.