ISLAMABAD: The government’s plan to offload defunct public-sector power generation plants under Genco Holding Company Limited (GHCL) has hit a major roadblock, with failed auctions and delayed payments forcing authorities to consider a direct handover of the scrap to Wah Industries — a subsidiary of the Ministry of Defence.
Initially designed to reduce the burden of operation and maintenance (O&M) costs, the auction plan is now under intense scrutiny. Sources revealed that despite initial enthusiasm, the first round of auctions held in March 2025 failed to bring in any actual proceeds nearly four months later. A second round of bidding never even commenced on its scheduled date.
Disappointed by repeated setbacks, the Energy Task Force, headed by Lt Gen Zafar Iqbal, has now opted for a policy shift — preparing to transfer the remaining power plants to Wah Industries through a government-to-government (G2G) arrangement by the end of this month.
Last year, the government announced plans to shut down aging and non-functional power plants operated by Gencos, intending to sell off obsolete machinery and equipment (excluding land) through open international bidding. GHCL was tasked with executing this plan within three months.
On March 18, nine old power plants were offered in the first round. Seven received qualifying bids totaling Rs9.05 billion, slightly above the reserve price of Rs8.07 billion — but no international bidder participated. Contracts required full advance payment or payment in four installments over three months.
Six contracts were awarded to M/S Daraza Builders, and one — for the 20MW Multan Cantt plant — went to M/S Malik Bashir Traders. However, almost none of the buyers fulfilled their payment obligations in full.
In the case of the 147MW Kotri Power Plant, Genco-I (JPCL) signed a Rs1.88 billion contract with Daraza, who deposited a 10% performance guarantee. Yet, no further payments followed, and Genco-I’s management failed to enforce delay penalties or send official notices — despite clear contractual terms.
Genco-II (CPGCL) returned a Rs96 million bid security to Daraza for the 50MW Sukkur Plant without finalizing a contract. At the 57.2MW Quetta Power Plant, a second-round bid of Rs601 million was submitted by Perfect Tel Company, but payments remain pending, allegedly with silent approval from senior Genco-II and GHCL officials.
Contract delays and procedural lapses are also under investigation in Genco-III (NPGCL). The deal for TPS Multan Cantt (20MW) was only signed three months post-auction, raising questions about the company’s intent. Contracts for NGPS Multan (260MW) and GTPS Shahdara (85MW), both awarded to Daraza, are only now being signed — with delays exceeding three and a half months. Meanwhile, the 247MW GTPS Faisalabad contract remains unsigned amid rumors of interest-driven gains.
Genco-IV (LPGCL) signed a Rs2.133 billion contract with Daraza for the Lakhra Power Plant in May 2025. Although the initial installment was received, the second was delayed by 18 days — underscoring the continued instability of the auction process.
With binding contracts missing, payments overdue, and enforcement mechanisms largely ignored, the government’s privatisation drive for outdated power plants seems on the brink of collapse — making a G2G salvage deal with Wah Industries the last resort.
