Power generation merger hits bureaucratic roadblock

ISLAMABAD: The bureaucratic set-up in the Power Division and its subordinate state-owned entities are resisting a reform process to merge oil-based, redundant, old power generation companies into the National Power Parks Management Company (NPPMC), despite a decision by the National Task Force on Energy and by Power Minister Sardar Awais Khan Leghari.

Informed sources told Dawn that these four generation companies (Gencos 1 to 4) had become redundant after the auction or closure of their old power plants, mostly as scrap, as part of the tariff reduction efforts that also included renegotiations with the independent power producers leading to a purported over Rs4 trillion savings over the remaining lives of all IPPs and government owned power plants.

Hundreds of their employees, including officers and engineers, were, therefore, transferred to the Distribution Companies (Discos) until March 31 as a temporary arrangement.

Following a series of meetings, the task force led by Lt Gen Zafar Iqbal and Mr Leghari, which concluded in the last week of February, decided to merge 660MW Jamshoro, 747MW-Guddu, 525MW Nandipur plant and Lakhra Power (Genco 1 to 4), and their parent company GHCL would be merged with NPPMC – a relatively lean and modern entity that was also operating LNG-based power plants.

The bureaucrats who mostly form part of the board of directors of Gencos and GHCL wanted their corporate perks and allowances, including vehicles, fuel and staff to continue, instead proposed Gencos merger into GHCL with additional staff requirements of about 55-60 personnel, around 8-10 in each Genco and then some additional workforce at GHCL Headquarters, an informed source said. Interestingly, the chief executive officer and the board of GHCL are still active, holding at least three board meetings a week, and each board member draws at least Rs100,000 per meeting, along with travel and boarding costs.

The task forces concluded that these members and deadwood in the companies were a burden on the public exchequer and on power companies’ financials, and that this should be stopped. Both the task force and the power minister finally decided on February 22 and 23 to merge these Gencos and GHCL into NPPMC and asked the Power Division to issue a formal notification for implementation.

The NPPMC management and board were also directed to prepare to take over the Gencos 1 to 4 and GHCL. However, as of March 12, the Power Division and GHCL, the umbrella organisation of Gencos, had not issued a formal notification regarding the merger and winding-up process.

The Power Division was formally approached to enquire about the non-implementation of the orders of its own minister and the task force. It said the GHCL chief executive, Shahid Mehmood, would get back with a response. Later, the GHCL chief conveyed a written response through the Power Division, stating that there was no decision as such.

“This is just an idea which has been discussed in the meeting, but no final decision has been taken yet because merging two companies is a complex issue and needs thorough consideration before its implementation. However, a committee is being formed to examine the plants in question and suggest the road map if and when the final decision is taken”, said Shahid Mehmood, CEO of Gencos Holding Company Ltd (GHCL).

However, official records seen by Dawn suggest the task force had officially conveyed to the power division and GHCL that “as a principal decision, it was decided that if NPPMCL’s existing workforce is sufficient, it shall manage the plants; otherwise, any additional hiring shall be undertaken by NPPMCL”. The task force is set to take up the matter again early next week.

Published in Dawn, March 15th, 2026

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