Staff Report
ISLAMABAD: The Federal Government is poised to approve the takeover of Rousch Pakistan Power Limited (RPPL) by the National Power Parks Management Company Limited (NPPMCL) as part of ongoing structural reforms aimed at reducing capacity payments and lowering electricity tariffs for consumers.
According to industry sources, the Power Division has prepared a summary titled “Taking Over of Rousch Power Plant by NPPMCL,” which will be presented to the Federal Cabinet for approval.
Both the Prime Minister and the Minister for Power Division have given their consent for the submission of this summary to the Cabinet, they added.
The move follows recommendations by a Task Force constituted by the Prime Minister on August 4, 2024, to restructure the power sector. The Task Force, in its presentation to the Prime Minister on September 2, 2024, and a subsequent briefing to the Cabinet on September 4, proposed terminating Power Purchase Agreements (PPAs) and Implementation Agreements (IAs) with five Independent Power Producers (IPPs), including RPPL.
Following negotiations, a settlement was reached with these IPPs, under which contracts would be terminated upon payment of a mutually agreed amount. Since RPPL was established under the Build-Operate-Own-Transfer (BOOT) model, it was also agreed that the power complex and site would be transferred to the Federal Government or its designated entity for a nominal price of just one US dollar. On October 10, 2024, the Cabinet approved NPPMCL as the designated entity to take over RPPL.
To facilitate the transition, NPPMCL presented a detailed takeover plan to the Task Force on November 19, 2024, outlining the required costs, actions, and government facilitation necessary to meet the Cabinet’s deadline of December 31, 2024. During a follow-up meeting on December 6, 2024, NPPMCL estimated the costs for acquiring the complex, transferring land, and maintaining the plant in dry-preservation mode for six months. The Task Force directed that the plant should remain non-operational for the time being, leading NPPMCL to rationalize maintenance costs and submit a final plan to the Power Division on December 9, 2024.
To formalize the process, an agreement between NPPMCL and the Federal Government has been drafted, in accordance with the State-Owned Enterprises (Governance and Operations) Act, 2023. The Prime Minister has approved submitting the summary to the Federal Cabinet for final approval.
