Chinese IPP Opposes One-Year Limit on Coal Deals

Port Qasim Electric Power Firm (PQEPC) has resisted a proposed one-year limit on coal supply agreements, warning that the restriction could disrupt fuel supplies, complicate procurement and growth risks for coal-fired power plants.

Key points

• NEPRA Sets Wheeling Charges, Clearing Way for Pakistan's First 400MW Power Auction.
• PQEPC additionally proposed that a public-sector agency take charge of procuring and supplying coal to power plants, citing NEPRA's June 22, 2026, recommendations.
• It rejected the employ of discounts ranging from $0.20 to $7.12 per metric ton as grounds for an adverse finding.
• PQEPC operates a coal-fired power complex with a capacity of 1, 320 megawatts.
• According to PQEPC, the $7.12-per-ton discount cited by the Power Division related to a contract that was never implemented and carried a performance guarantee of regarding Rs.

According to comments submitted to the Central Power Purchasing Agency-Guarantee (CPPA-G), the firm additionally challenged a proposal to compare coal procurement discounts throughout tenders, arguing that differences in supplier offers do not, by themselves, indicate irregularities.

PQEPC operates a coal-fired power complex with a capacity of 1, 320 megawatts. It remarked its imported coal purchases complied with its approved tariff determination, generation license, power purchase agreement and implementation agreement with the administration. The firm argued that procurement guidelines could not override these contractual and regulatory requirements unless formally incorporated into them.

Meanwhile, the firm stated tenders could not be compared on headline discounts alone since they differed in quantities, contract periods, payment currencies, delivery arrangements, coal quality requirements and performance guarantees. It rejected the employ of discounts ranging from $0.20 to $7.12 per metric ton as grounds for an adverse finding.

According to PQEPC, the $7.12-per-ton discount cited by the Power Division related to a contract that was never implemented and carried a performance guarantee of regarding Rs. 5 million. The firm stated this guarantee represented only a fraction of the financial exposure it required from its own suppliers, making the contract an unsuitable benchmark.

PQEPC additionally questioned the apply of historical discounts on Indonesian coal as a permanent benchmark, citing tighter quality requirements and supply constraints. It remarked the minimum acceptable net as-received calorific value had climbed from 4, 000 to 4, 200. The firm further cited a 23.34 percent year-on-year decline in Indonesia's seaborne coal exports in August 2026, alongside noted supply and logistical constraints. LESCO Accused of Overbilling Consumers Through Smart Meters.

For context, the firm argued that suppliers might charge more for coal gathering the revised quality standards and that changes in discounts should not automatically be treated as evidence of misconduct. It additionally stated differences in offers to independent power producers could reflect varying contract terms, quantities and risk profiles.

Defending its employ of backup suppliers, PQEPC stated securing coal at a lower discount than the one available under a principal supply contract could be necessary if the main supplier failed to deliver. Such arrangements, it argued, supported protect power plants from fuel shortages, capacity payment deductions and liquidated damages under power purchase agreements.

Opposing the proposed one-year contract limit, PQEPC remarked international coal miners and vessel owners generally did not enter supply arrangements on such short horizons without minimum purchase commitments. It additionally cautioned that mandatory annual retendering could leave insufficient time for board, shareholder and regulatory approvals. Solar Adoption Under Pressure.

PQEPC blamed CPPA-G's alleged failure to meet minimum annual energy payments for the lack of minimum coal purchase commitments. It remarked monthly fuel rate adjustments already allow NEPRA to review procurement costs.

For context, the firm backed holding defaulting suppliers accountable but pressed due process, hearings and exemptions for force majeure and other circumstances beyond either party's control.

PQEPC remarked it bears fuel supply risks, earns no return on fuel costs and recovers only verified expenses through tariffs. It cited a loss of regarding $0.58 per metric ton in its latest fuel rate adjustment and Rs. 1.62 billion under spot coal procurement guidelines. It pressed the administration and CPPA-G to assess procurement against project agreements, reject claims of irregularity based solely on differing tender discounts, reconsider the one-year contract limit and include safeguards in supplier-default rules.

PQEPC additionally proposed that a public-sector agency take charge of procuring and supplying coal to power plants, citing NEPRA's June 22, 2026, recommendations. Stay Connected with ProPakistani.

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In short, chinese IPP Opposes One is the central thread here, and readers can expect follow-up reporting as the picture becomes clearer.