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ISLAMABAD: The government got an apathetic response to its auction for three inefficient power plants, compelling it to go for a second round of bidding by the end of this month.
Only a single bidder — Siddiqsons from Karachi — came up with a bid for Jamshoro Power Company Ltd (JPCL). Two other plants — Muzaffargarh and Faisalabad — did not fetch even a single offer. The government set a combined reserve price of Rs26.625 billion for the three plants with 2,362MW of cumulative generation capacity.
The auction was called through a ‘single-stage two envelop’ bid to ensure transparency, said the Ministry of Energy (Power Division), adding the bidding date was set for May 19. “Only one company, Siddiqsons, submitted a bid for JPCL. No company submitted any bid for Muzaffargarh and Faisalabad Power plants”, the Power Division said. The date for opening bids has been extended till May 30, it said in a statement.
The government held open bidding for the disposal of three old and defunct power plants on an “as-is, where-is” basis. These include 880MW Jamshoro Thermal Power Ltd, 1,350MW Northern Power Generation Company Ltd-Muzaffargarh, and 132MW Central Power Generation Company Ltd-Faisalabad Steam Power Station.
Jamshoro gets sole bid; Muzaffargarh and Faisalabad receive none
The Power Division said 29 power plants with a generation capacity of 4,074MW have been selected for auction at a reserve price of Rs40.461bn. These include blocks and units from Jamshoro, Guddu, Muzaffargarh, Quetta and Faisalabad.
The bidding process for other plants of Genco-II, including the Guddu Thermal Power Plant and TPS Quetta, has been postponed. These assets will now be offered on May 30 in a separate round to ensure greater investor participation with improved terms of sale.
Chief executive officer of NPGCL Sabih-uz-Zaman Farooqi confirmed a lacklustre response from investors, adding that the auction of redundant and outdated power assets was always expected to proceed in phases due to the age and condition of the plants.
The process is technically complex, and investor appetite varies depending on plant location, efficiency, and future viability, he added.
Previously, the government sold seven thermal plants for Rs9.05bn — almost a billion rupee higher than the reserve price of Rs8.07bn. Three units were located at Kotri, Larkra, and Sukkur, and four in Multan and Faisalabad.
“We will assess why there are no bids for Muzaffargarh and Faisalabad,” Mr Farooqi said.
Before bidding, prospective bidders had raised concerns regarding the applicability of income and sales taxes and the exemption of sales tax on metal scrap under prevailing tax laws.
However, NPGCL clarified that the assets were being auctioned on “as-is, where-is” basis and do not fall under the category of scrap.
Therefore, sales tax will be applied at the standard rate of 18pc for registered firms, with an additional 4pc for unregistered firms.
Also, 10pc advance income tax applies to bidders with active taxpayer status and 20pc for non-active taxpayers.
Bidders also requested a reduction in the performance security requirement from 10pc to 5pc of the total contract price. However, the NPGCL management insisted that bidders must adhere to the provisions outlined in the issued bidding documents.
The bidders also sought various other relaxations, including disclosure of item-wise reserve price, which was unacceptable to the auction team.
Published in Dawn, May 20th, 2025
