Port Qasim Electric Power Company (PQEPC) has opposed a proposed one-year limit on coal supply agreements, warning that the restriction could threaten fuel security and complicate procurement for coal-fired power plants.
In its submission to the Central Power Purchasing Agency-Guarantee (CPPA-G), the company also challenged proposed rules for comparing coal procurement discounts. It argued that differences in supplier offers do not automatically indicate irregularities.
Company Questions Proposed Coal Contract Restrictions
PQEPC operates a 1,320-megawatt coal-fired power complex. The company maintains that its imported coal purchases comply with its approved tariff, generation licence and agreements with the government.
It also argues that procurement tenders cannot be compared using headline discounts alone. Differences in coal quality, contract duration, quantities, payment currencies, delivery terms and performance guarantees can affect supplier offers.
The company rejected comparisons between discounts ranging from $0.20 to $7.12 per metric ton. According to PQEPC, the higher discount came from a contract that was never implemented and carried a performance guarantee of approximately Rs5 million.
Indonesian Coal Supply Raises Concerns
PQEPC also questioned the use of historical discounts on Indonesian coal as a permanent benchmark. It cited tighter quality requirements and supply constraints that could affect prices.
The company said the minimum acceptable coal calorific value had increased from 4,000 to 4,200. It also pointed to a reported 23.34% year-on-year decline in Indonesia’s seaborne coal exports in August 2026.
As a result, suppliers may charge more to meet the revised quality standards. PQEPC argues that changing discounts should not automatically trigger allegations of misconduct.
Backup Suppliers and Consumer Costs
The company defended backup supply arrangements, saying they help prevent fuel shortages when primary suppliers fail to deliver. Such shortages could expose power plants to capacity-payment deductions and contractual penalties.
PQEPC also opposed mandatory annual retendering, warning that the process could leave insufficient time for internal approvals and regulatory clearances. It said existing monthly fuel price adjustments already allow regulators to review procurement costs.
The company supports holding defaulting suppliers accountable but wants due-process safeguards and exemptions for force majeure events.
Finally, PQEPC urged the government to reconsider the one-year limit and assess procurement against relevant agreements. It also proposed assigning a public-sector agency responsibility for procuring and supplying coal to power plants.
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