Islamabad, May 26, 2025: A subcommittee of the Public Accounts Committee (PAC) was informed on Monday that the Multan Electric Power Company (MEPCO) bought electricity worth nearly Rs. 988.7 million from captive power producers without first securing clearance from the National Electric Power Regulatory Authority (NEPRA).
During an audit briefing, MEPCO signed a power purchase agreement with one entity in 2010 for the supply of 10.5 MW of electricity. However, the company only notified NEPRA about this contract a year later, in 2011.
Audit officials told the committee that such contracts, signed without prior consent from the regulatory body, go against established procedures. One of the members of the committee asked whether anyone was held accountable for this violation. Officials replied that the Departmental Accounts Committee (DAC) had directed that a formal inquiry be launched into the matter.
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Later, the Multan Bench of the Lahore High Court issued a stay order, halting the process of recovering the funds involved. The PAC had earlier classified the issue as sub judice during its meetings in 2015 and again in 2017. Although MEPCO restarted the recovery process in 2017 after NEPRA gave its decision, the case is still in the courts.
The Secretary of Power told the committee that the most recent court proceedings were held on May 20, and the next hearing is scheduled for June 18.
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In a separate observation, the audit team reported that MEPCO had purchased over 2,100 transformers that were manufactured with substandard materials, resulting in a financial loss of Rs. 461.5 million. An internal investigation blamed three local suppliers for the defective equipment. The National Accountability Bureau (NAB) later took up the case, but it was closed after no evidence was found to support the use of scrap material in the manufacturing process.
