The National Electric Power Regulatory Authority (Nepra) has advised the prime minister to establish a dedicated coal authority to handle all issues relating to coal imports, such as tendering, product specifications, and other related issues.
This was revealed by Nepra chairman Tauseef H. Farooqui while presiding over a public hearing on coal import guidelines, as some stakeholders, including independent power producers (IPPs) and coal suppliers, expressed concerns about the bidding process, particularly the procurement of coal from Afghanistan and the spot market, and demanded a transparent mechanism.
Many representatives from various stakeholders, including the Private Power Infrastructure Board (PPIB), the Thar Coal Energy Board, IPPs, the Ministry of Energy, the Central Power Purchasing Agency (CPPA), coal importers and suppliers, and others, attended the hearing.
Mr Farooqui added that coal supplies were outside the standard regulatory mechanism, unlike other fuels. With its growing share of the energy supply, it required professional handling by relevant experts, adding that he had advised the prime minister to establish a coal authority.
The regulator has taken note of the concerns and suggestions of stakeholders and will revise the guidelines as soon as possible so that coal-fired power plants can begin purchasing from the above sources and generate cheaper electricity.
Moreover, various measures were proposed during the public hearing to facilitate coal imports from Afghanistan and spot purchases.
The hearing was informed that the CPPA had imposed a condition of Rs100 million paid-up capital for coal suppliers, which acted as an entry barrier and should be reduced to Rs50m to allow more coal suppliers to participate in bidding for coal import.
The regulator stated that the suggestion would improve competition. According to reports, only two companies participated in one of the bidding rounds when the condition of Rs100m paid-up capital was enforced. Still, approximately 35 companies participated in bidding for coal when the limit was set at Rs50 million.
In addition, some suppliers even suggested that there should be no requirement for paid-up capital when submitting performance guarantees. However, it was revealed that the paid-up capital requirement was intended to attract bids from companies with strong financial positions.