NGC BoD constitutes restructuring body to oversee transition
ISLAMABAD: The National Grid Company (NGC), formerly known as the National Transmission and Despatch Company (NTDC), has informed the Power Division that its Board of Directors (BoD) has constituted a Restructuring Committee to oversee all phases of the transition, as approved by the Federal Cabinet, sources told Business Recorder.
The move follows a letter from the Power Division dated November 20, 2024, regarding the implementation of the Cabinet's decision— communicated on November 6, 2024— to restructure NTDC.
Maria Rafique, Chief Law Officer (CLO) of NGC, informed the Power Division that, in compliance with the Cabinet directive, NTDC shareholders in their 2nd Extraordinary General Meeting on December 26, 2024, unanimously resolved to change the company's name to National Grid Company of Pakistan Limited, subject to approvals from the Securities and Exchange Commission of Pakistan (SECP).
Cabinet decides to divide NTDC into two entities
To facilitate this transition, the CLO was authorised to carry out all necessary legal and procedural requirements.
Nepra issued its no-objection to the proposed name change on February 24, 2025, in response to the application submitted on December 19, 2024. Subsequently, SECP formally approved the change through a Certificate of Incorporation on March 20, 2025 (Identification No. 0039611).
Simultaneously, the Energy Infrastructure Development and Management Company (EIDMC) was also incorporated. The Ministry of Energy (Power Division) submitted incorporation documents, including the Articles and Memorandum of Association, to SECP on January 1, 2025. SECP issued the Certificate of Incorporation on January 3, 2025, under Section 16 of the Companies Act, 2017, legally establishing the company.
Following incorporation, the CLO communicated post-incorporation steps via emails dated January 15, January 28, February 25, and March 28, 2025, to relevant officials in the Power Division under the framework of the State-Owned Enterprises Act and SECP regulations.
On the matter of the Independent System & Market Operator (ISMO), NGC's Legal Department facilitated its incorporation by preparing the Articles and Memorandum of Association and ensuring full regulatory compliance. ISMO was formally incorporated on December 4, 2024. To support ISMO's operationalization, NGC allocated legal, finance, and HR resources with effect from January 1, 2025. Additionally, NTDC, CPPA-G, and ISMO jointly submitted applications to Nepra for the transfer and acquisition of relevant licenses on December 31, 2024.
Business Transfer Agreements (BTAs) and Service Level Agreements (SLAs) between NTDC and ISMO, as well as between CPPA-G and ISMO, have been approved by the respective Boards and signed by all parties involved.
Although the Power Division's directive only required NTDC's Board to implement the transitions to NGC and EIDMC, the company also proactively supported the incorporation and initial operations of ISMO.
The restructuring is progressing in line with the Cabinet's directives, with major milestones already achieved. The transition to the National Grid Company of Pakistan Limited remains ongoing, including steps such as organisational rightsizing.
'We have been regularly updating the Power Division on restructuring progress as required. Further updates will be provided upon completion of the remaining formalities,' said Maria Rafique, adding that the BoD of NGC has formally established a Restructuring Committee to guide the transition.
Nepra has also issued licenses to the newly established entities, supporting the restructuring process and marking a significant advancement in Pakistan's power sector reform agenda.
Copyright Business Recorder, 2025
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By permitting a higher loss level, KE passes on an extra Rs. 3.1 billion in FY 2024, rising to about Rs. 21 billion over the control period. 'Law & Order' Margin: KE received a special 2 percent margin to offset security costs in Karachi—a perk not granted to any other utility, even those operating in equally or more volatile regions. Moreover, Law & Order in Karachi has improved considerably over the last few years, and thereby there exists no reason for such a margin. This margin adds approximately Rs. 14 billion in FY 2024 and up to Rs. 99 billion over the multi-year period to KE's revenue requirement. Retention of 'Other Income': KE is allowed to keep money from fines imposed on its contractors, interest on bank deposits, and profits from side businesses. In effect, consumers have already paid for the assets that generate these incomes, so these funds should reduce KE's costs to customers, not pad its revenue. 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Distribution (delivering power to homes & businesses)- High distribution - RoE disparity: KE's distribution arm was allowed 14 percent RoE in U.S. dollars (about 29.68 percent in rupees). By comparison, other Discos like FESCO get only about 14.47 percent RoE in rupees. This adds roughly Rs. 3.7 billion in FY 2024 and Rs. 35.6 billion over the control period to KE's revenue. Distribution Loss & Special Allowance: KE was granted an extra 2 percent 'law & order' margin on top of its allowed losses, even though Karachi's security situation is similar to or better than other regions. KE also keeps 25 percent of any savings if it performs better. These practices cost consumers about Rs. 14 billion in FY 2024 and up to Rs. 99 billion over the multi-year period. Working Capital Markup: A 23.91 percent markup was approved for KE's distribution working capital—far higher than any other utility. 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This will result in overall higher bills for Karachi customers; KE's allowed costs, profit margins, and extra allowances will cause Karachi consumers' electricity bills to rise significantly compared to other regions. Several KE cost items—especially the inflated fuel benchmark and payments to idle plants—are effectively covered by the government, stretching public finances. The determinations are unfair treatment & efficiency discouraged: Granting KE advantages not given to other utilities creates a 'two-tier' system. This discourages KE from boosting efficiency, and it undermines transparent, consistent tariff-setting nationwide. The Government maintains that all utilities should be treated equally. KE should not receive special cost or profit allowances unavailable to other power companies and tariffs must reflect actual costs and reasonable returns. Extra allowances for inefficiency and high profit rates must be removed to keep bills affordable. For regulatory accountability Nepra should revise assumptions, benchmarks, and profit margins so they align with real performance data and the standards used for other utilities. Copyright Business Recorder, 2025
