Pakistan’s Power Sector Reform Stalled: Bureaucratic Resistance Threatens Efficiency Gains
Islamabad – A critical overhaul of Pakistan’s power generation sector is facing significant headwinds, as bureaucratic resistance within the Power Division and state-owned entities delays the merger of redundant power plants into the National Power Parks Management Company (NPPMC). Despite directives from the National Task Force on Energy and Power Minister Sardar Awais Khan Leghari, the process remains stalled, raising concerns about the future of energy sector efficiency and cost reduction.
The Redundant Gencos and the NPPMC Plan
Four government-owned generation companies – Genco 1 to 4 – have become largely redundant following the auction or closure of their aging oil-based power plants. These closures were part of a broader strategy to reduce tariffs, which also included renegotiations with Independent Power Producers (IPPs) resulting in reported savings exceeding Rs4 trillion. The plan, spearheaded by the National Task Force on Energy led by Lt Gen Zafar Iqbal, aimed to consolidate these redundant assets under the NPPMC, a leaner and more modern entity already operating LNG-based power plants.
A Battle Over Perks and Allowances
The core of the resistance lies with bureaucrats serving on the boards of directors of the Gencos and their parent company, GHCL. These officials are reportedly unwilling to relinquish corporate perks, including company vehicles, fuel allowances, and staff. Instead of supporting the merger into NPPMC, they proposed merging the Gencos into GHCL, a move that would necessitate additional staffing – approximately 55-60 personnel across the Gencos and GHCL headquarters – effectively maintaining the existing benefits structure.
According to sources, board members of GHCL currently receive at least Rs100,000 per meeting, in addition to travel and boarding expenses. The Task Force deemed this a burden on public finances and advocated for the NPPMC merger to eliminate these costs.
Temporary Measures and Delayed Implementation
As a temporary measure, hundreds of employees from the redundant Gencos were transferred to Distribution Companies (Discos) until March 31. However, as of March 12, 2026, the Power Division and GHCL had not issued a formal notification initiating the merger and winding-up process. When questioned, GHCL CEO Shahid Mehmood characterized the plan as merely a “discussion” requiring “thorough consideration,” and announced the formation of a committee to examine the plants.
Official records contradict this claim, indicating that the Task Force had explicitly communicated to the Power Division and GHCL that any additional hiring should be undertaken by NPPMC if its existing workforce proved insufficient.
The Broader Context: Pakistan’s Energy Challenges
This bureaucratic impasse highlights the ongoing challenges facing Pakistan’s energy sector. The country has long struggled with circular debt, inefficient power generation, and transmission losses. Streamlining operations and reducing costs through consolidation, as envisioned with the NPPMC merger, is crucial for ensuring a sustainable and affordable energy supply.
The NPPMC itself operates the 1223 MW Balloki combined-cycle gas-fired power plant, a relatively efficient facility contributing significantly to Pakistan’s energy grid.
FAQ
Q: What are Gencos?
A: Gencos are government-owned power generation companies.
Q: What is NPPMC?
A: NPPMC is the National Power Parks Management Company, a relatively modern entity operating LNG-based power plants.
Q: Why is the merger being resisted?
A: Bureaucrats within the Power Division and GHCL are resisting the merger primarily to retain their corporate perks, and allowances.
Q: What was the reported savings from renegotiating with IPPs?
A: Over Rs4 trillion in savings were reportedly achieved through renegotiations with Independent Power Producers.
Q: What is the current status of the employees from the redundant Gencos?
A: Hundreds of employees have been temporarily transferred to Distribution Companies (Discos) until March 31.
Did you know? The National Task Force on Energy, chaired by Lt Gen Zafar Iqbal, initiated this reform process to streamline operations and reduce costs.
Pro Tip: Staying informed about developments in Pakistan’s energy sector is crucial for investors and businesses operating in the country.
Stay updated on this developing story and explore more insights into Pakistan’s energy landscape. Share your thoughts in the comments below!
