Mian Zahid demands paying capacity charges from federal budget
KARACHI: Mian Zahid Hussain, President Pakistan Businessmen and Intellectuals Forum and All Karachi Industrial Alliance, Chairman National Business Group Pakistan, Chairman Policy Advisory Board FPCCI, has urged the Federal Government to pay the capacity charges of the country’s surplus electricity - which amounted to approximately Rs. 1,700 billion in 2025-2026 - from the federal budget instead…
Mian Zahid Hussain, head of the Pakistan Businessmen and Intellectuals Forum, has called on the federal government to fund the excess electricity generated in Pakistan, which totaled around Rs. 1,700 billion in 2025-2026, through the national budget rather than electricity bills, to make it more affordable for industries. Hussain emphasized that moving towards a competitive energy market is not optional but a matter of national economic survival.
He also advocated for the immediate privatization of inefficient distribution companies (DISCOs). Hussain emphasized the importance of implementing the Competitive Trading Bilateral Contract Market (CTBCM) swiftly and transparently, along with proper wheeling regulations, as it will drive industrialization, generate jobs, facilitate import substitution, and boost exports.
He affirmed that the business community stands ready to support the government's power sector reforms, provided they prioritize industrial sustainability and economic stability over preserving obsolete monopolies. Hussain highlighted that the transition from a monopoly to a competitive, multi-buyer, and multi-seller electricity market through CTBCM is a significant economic step.
He explained that the CTBCM aims to eliminate the longstanding monopoly of the Central Power Purchasing Agency (CPPA-G) by turning it into a competitive wholesale electricity market. Under this model, bulk power consumers requiring at least 1 megawatt of electricity will have the option to buy directly from power generators through B2B contracts, bypassing their local DISCO.
The system will be overseen by the Independent System and Market Operator (ISMO), allowing buyers to use the existing grid infrastructure for procurement and pay Use of System Charges (UoSC) or wheeling charges for this usage. Hussain expressed concern about the wheeling charges and the "stranded costs" recently approved by NEPRA, noting that the base wheeling charges (UoSC) range from Rs.
6.23 to Rs. 9.09 per unit, and the addition of up to Rs. 16.35 per unit for industries not part of the auction could escalate these charges to over Rs. 25 per unit for certain sectors. He stressed the need to rationalize these charges.
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