Underutilization of Matiari – Lahore HVDC transmission line burdens consumers with Rs 86.5 billion

ISLAMABAD: The Auditor General of Pakistan (AGP) has held National Grid Company (NGC) erstwhile National Transmission and Despatch Company (NTDC) responsible for financial burden of Rs 86.5 billion on electricity consumers due to the under-utilization of the Matiari to Lahore ±660 kV HVDC Transmission Line.
According to Section 3.1 of the “Sales and Purchase of Transmission Services” agreement, the purchaser is obligated to pay for the contracted capacity from the Commercial Operations Date, as described in Article IXX and Schedule 1, subject to the agreement’s terms and technical specifications.
Clause 10 of the Transmission Line Project (2015) states: “The power system operation, including system security, voltage control, and generation dispatch, shall be the sole responsibility of NTDC/NPCC.”
During the performance audit of the ±660 kV HVDC Transmission Line project (up to the financial year 2023–24), it was found that actual utilization of the line averaged only 47.55% of its optimal technical capacity. This calculation was based on 80% of the 4,000 MW capacity with 98.5% availability, resulting in a cumulative under-utilization of 41.02 billion kWh.
This systematic inefficiency led to an avoidable financial burden of Rs 86.456 billion on electricity consumers due to NTDC’s “take-or-pay” obligations, where payment was required for idle capacity regardless of usage.
Monthly utilization data showed wide fluctuations — from as low as 17% in November 2021 to a peak of 62% in August 2023. While there were brief improvements between April and August 2023, corresponding with seasonal peak demand, the line remained significantly under-utilized for most of the year.
The AGP attributed this under-utilization to NTDC/NPCC’s failure to coordinate generation dispatch and system demand with the 4,000 MW take-or-pay commitment. Despite securing this strategic transmission asset, no integrated planning mechanism was established to ensure its optimal use.
The lack of coordination between generation availability, transmission scheduling, and actual load flow resulted in idle capacity and significant financial losses. NTDC paid Rs 86.456 billion for unutilized transmission capacity — a cost passed on to electricity consumers without any corresponding benefit.
The AGP observed that the failure to utilize the 660 kV HVDC line effectively nullified the value of this critical national asset and reflected a serious lapse in operational accountability.
When the matter was taken up with NTDC management in July 2025, it responded that a high-level inquiry report had already been submitted to the Prime Minister’s Office by the Power Division under the subject: “Non-utilization of Full Capacity: HVDC Matiari–Lahore Transmission Line.”
However, the AGP deemed this response untenable, stating that no justification for the under-utilization was provided.
The audit has recommended:(i) Submission of the inquiry report; (ii) clear explanation of the causes of under-utilization; and (iii) implementation of system-wide planning protocols to avoid similar losses in future take-or-pay projects — under intimation to audit authorities.