ISLAMABAD – After repeated failures to auction defunct power plants under Genco Holding Company Limited (GHCL), the government is now considering a direct government-to-government (G2G) deal with Wah Industries. This shift comes after failed bidding rounds and continued delays in payments from private contractors.
The Energy Task Force, led by Lt Gen Zafar Iqbal, was responsible for overseeing the auction of outdated public sector generation units. Although the first auction round attracted qualified bids for seven out of nine plants, totaling Rs9.05 billion, payment delays and contract issues soon derailed the process. No international bidders participated, and the second auction didn’t take place as scheduled.
In several cases, winning bidders failed to meet payment deadlines. For instance, Daraza Builders secured six contracts, including the 147MW Kotri Power Plant, but failed to make payments. Similarly, Genco-II returned a bid security of Rs96 million for the 50MW Sukkur plant due to a lack of finalized agreements.
Furthermore, delays plagued deals for other plants. Perfect Tel Company submitted a Rs601 million bid for the 57.2MW Quetta plant but failed to pay. Genco-III also failed to sign a contract for the 20MW Multan Cantt plant for over three months after auction closure. These repeated lapses raised concerns about poor enforcement by Genco management.
Due to these ongoing setbacks, the Energy Task Force opted to consider transferring all remaining assets to Wah Industries under a G2G arrangement. This new approach, expected to be finalized by the end of the month, aims to avoid further financial and procedural delays.
This policy change highlights the challenges faced in privatizing state-owned assets and managing large-scale energy reforms. While the move may reduce fiscal pressure from maintaining defunct plants, it also underscores the complexities in executing transparent and effective public sector transitions.