Power scandal: WAPDA at Rs2.70, IPPs at Rs34 — Senate data raises questions over Rs850 billion payment gap

If Pakistan’s power crisis is to be understood in simple numbers, two figures presented in data before the Senate offer

ISLAMABAD : If Pakistan’s power crisis is to be understood in simple numbers, two figures presented in data before the Senate offer a striking starting point: Rs2.70 per unit for Tarbela hydropower and Rs34.17 per unit for Sahiwal’s imported-coal generation.

The figures have triggered renewed questions about the country’s electricity generation mix, the cost of private power and the long-term financial burden carried by consumers.

According to the Senate data for FY2024-25, WAPDA generated around 34.5 billion units and received payments of approximately Rs186 billion. The average reported generation cost of WAPDA dams was Rs5.39 per unit, while Tarbela stood at just Rs2.70 and Mangla at Rs3.75 per unit.

In comparison, private Independent Power Producers generated around 49.8 billion units while receiving approximately Rs1,040 billion. This means IPPs produced around 15.3 billion more units than WAPDA but received roughly Rs854 billion more in payments.

The figures raise an important question: why is there such a substantial difference between the cost of electricity generated through Pakistan’s public hydropower assets and electricity produced by some privately operated plants?

The plant-wise figures make the contrast even sharper. Tarbela was listed at Rs2.70 per unit, followed by Mangla at Rs3.75. The average cost of electricity generated by WAPDA dams was Rs5.39 per unit, while Chashma nuclear generation stood at Rs6.76.

Local Thar coal was reported at Rs19.03 per unit. On the other side of the comparison, Port Qasim’s imported-coal generation was listed at Rs32.16 per unit, while Sahiwal’s imported-coal generation stood at Rs34.17.

The difference between Rs2.70 and Rs34.17 represents more than a twelve-fold gap in the reported generation costs. However, these figures should not be confused with the final electricity tariff paid by consumers, which also includes transmission, distribution, taxes, duties and other adjustments.

The wider issue is Pakistan’s power policy. The country has relied on a combination of hydropower, nuclear generation, local fuels, imported fuels and private power projects. IPP agreements have also included capacity-payment mechanisms under which payments can be made for available generation capacity even when electricity is not being fully dispatched.

These contractual arrangements have remained a major subject of debate as Pakistan struggles with circular debt, high electricity tariffs and pressure on households and industry.

The central question is now whether the country can reduce its dependence on expensive generation while expanding lower-cost domestic resources. Greater investment in hydropower, better use of indigenous fuel resources and a review of existing contractual arrangements are among the issues requiring detailed examination.

The Senate figures do not, by themselves, establish that every payment to an IPP is unjustified or that the entire Rs854 billion difference represents an avoidable loss. But they do highlight a significant disparity that deserves transparent scrutiny.

For consumers facing increasingly difficult electricity bills and businesses struggling with high energy costs, the debate is ultimately about one basic question: how can Pakistan produce reliable electricity at the lowest sustainable cost?

The answer will depend not only on new power projects, but also on how existing contracts, capacity payments, fuel costs and public-sector generation are managed.

The Rs2.70 versus Rs34.17 comparison has therefore placed Pakistan’s power-generation strategy under renewed scrutiny — and demands a closer look at where every rupee paid for electricity is going.