Matiari-Lahore transmission line project: Technical, contractual issues resolved

LAHORE: Both technical and contractual issues of 660 kV HVDC Matiari-Lahore Transmission Line Project, a China-Pakistan Economic Corridor (CPEC) project, have been resolved amicably.

According to the National Transmission and Despatch Company (NTDC) spokesman, the project has been envisioned to evacuate power from power plants in the South of the country. It has a designed capacity of 4000 MW and is being built on a Build, Own, Operate and Transfer (BOOT) basis. The project will be owned and operated by Pak MLTC for 25 years and after that, it will be transferred to NTDC. HVDC is a new technology in Pakistan and is widely being used around the world in long-distance transmission.

He said the project agreements were signed between NTDC and M/s Pak MLTC at the Prime Minister’s House Islamabad on 14th May 2018 and construction of the project was started in December 2018. Currently, the construction of the project is almost complete and the project is at advanced stages of testing and commissioning and more than 95 percent of testing and commissioning stands completed.

During the latter part of the testing and commissioning, while the project was energized on low power testing on 02.12.2020, severe frequency oscillations were experienced throughout the network, and to avoid the network outages, the HVDC system was blocked after around 14 minutes of operation on lower power at 200 MW flow on Line. Afterward, NTDC revisited all the technical and contractual details pertaining to testing and commissioning and after a detailed analysis, the testing activities of the project were halted on 11.12.2020 and a Notice of Dispute was served by NTDC to the project company on various technical and contractual grounds.

He further added that the project company prepared a detailed Root-Cause Analysis Report of the frequency oscillations event and submitted the same for review of Owner Engineer, M/s Hatch Canada, and Independent Engineer, M/s CESI. Both recommended some changes, suggested mitigation measures, and highlighted certain pre-requisites to be fulfilled before the resumption of testing and commissioning. Apart from that, there were certain contractual obligations that were impacted by the Covid-19 pandemic and were considered essential to proceed with testing. Therefore, the process of negotiations between NTDC and the project company was started in order to devise a way forward based on good faith between the parties.

Thereafter, he said, a series of high-level discussions were started between NTDC and Pak MLTC to resolve the issues under the dispute resolution mechanism provided in the contract documents. Detailed discussions between the parties to resolve the issues continued for around two months and each and every issue was deliberated upon during the said period. Negotiating teams from both parties worked day and night to reach plausible solutions on the matters under dispute. It is also imperative to state that various forums and entities were actively involved in this whole process of negotiations, that is, the Ministry of Energy, PPIB, BoD NTDC, Foreign Office, chairman CET China, and CPEC Authority played a vital role during the proceedings of negotiations and provided amicable support to close the issues and reach common grounds to move forward. Resultantly, the MoU was signed between NTDC and Pak MLTC on 18.02.2021, with new targeted COD of the project on 1st September 2021, along with outlining a road map for undertaking further testing and commissioning activities of the project. As a result of MoU, low power testing of the project was resumed at the end of February, which continued in the month of March 2021. Currently, low power testing of the project is complete, up to the level of 800 MW, for both Monopole and Bipole, and further trial run at low power will continue till 30th April 2021, and then high-power testing for 2200 MW and 4000 MW will be started which will be continued till 31st August 2021, and pursuant to successful completion of high-power testing, the COD of the project shall be declared on 1st September 2021, accordingly.

The agreements reached in the MoU by the management of both parties were translated into amendments in the contract documents and external counsels were engaged to draft addendum agreements to supplement the common grounds agreed upon. The draft addendum agreements, incorporating changes in the main agreements, were initialed on 18.02.2021 in WAPDA House Lahore by management of both parties and were thereafter put forth to both CET and NTDC board of directors for approval and were approved by both Board of Directors accordingly and then were approved by BoD of PPIB and were further sent to Ministry of Energy for securing approval of Govt of Pakistan.

The summary for approval of Addendum Agreements was taken up at ECC on 31.03.2021. As per these addendum agreements CoD of the project shall be declared on 1st September 2021, and NTDC will take over partial O&M of Line, limited to patrolling.

It is pertinent to indicate that at the moment HVDC Project is energized at low power and energy is being transferred through the Line as test energy, as per agreed points in the MoU and the project will continue to operate on a trial run basis on low power till 30th April 2021 and thereby cheaper energy from southern power plants will be added in the national grid.

The successful and amicable resolution between Chinese company and NTDC speaks to the volume of Pak-China long last friendship which will further enhance the cooperation between the two brotherly countries.

Copyright Business Recorder, 2021