NEPRA must rigorously scrutinise Wapda’s petition for a staggering 91pc revenue hike to Rs365bn in FY26 from Rs191bn in FY23 to determine whether it will truly enhance the water and power authority’s performance or merely pass on the burden of its inefficiencies to the public exchequer and consumers. If the new tariff is approved, it would nearly double the bulk hydropower tariff to about Rs11.55 per unit from Rs6.10. The justification advanced by Wapda rests on bridging the financial gap, rising O&M costs, depreciation charges, net hydel profits and sharply rising returns on investment and capital for the past three years. How far is Wapda justified in seeking this increase in tariffs? It is difficult to come to a conclusion until we hear the expert arguments for and against the demand at the Nepra hearing next Thursday.

Yet, the sheer scale of escalation in Wapda’s revenue needs will not be easy to justify. For one, the petition coincides with serious questions raised by the auditor general’s latest report regarding the poor quality of planning, execution and engineering of the Neelum-Jhelum hydropower project. This makes Wapda’s case far weaker than it would otherwise have been as the project has neither secured Pakistan’s water rights nor delivered the designed energy output. Equally concerning is the lack of clarity over demand for returns on investment and weighted average cost of capital calculations. Thus, Nepra is right to frame issues — for its hearing — around Wapda’s demand for a hike in O&M expenses, depreciation charges and returns on power stations and investments in power projects, besides questioning the request for the allowance of regulatory gaps. The upcoming hearing should be more than a routine tariff review and hold Wapda to account not just for financial indiscipline and governance, but also for its poor quality of project planning, execution and engineering. Already burdened by high energy prices, it would be unfair to ask consumers to continue footing the bill for Wapda.

Published in Dawn, September 5th, 2025