Evacuating electricity from Thar: Nepra grills NTDC for not completing transmission lines

ISLAMABAD: National Electric Power Regulatory Authority (Nepra) on Tuesday grilled National Transmission and Despatch Company (NTDC) for not completing transmission lines to evacuate electricity from Thar, which will cause Rs 80 billion financial loss.

During a public hearing on FCA of January 2023, the authority also sought update report on black start facility, operating procedure, and written authentication letter of Minister Power to operate Kot Addu Power Plant (KAPCO) to restart system during recent blackout.

The Authority expressed serious concerns at NTDC for not taking measures to isolate North and South at the time of technical fault which ultimately deprived the entire country of electricity. Nepra’s Monitoring and Enforcement (M&E) Section has proposed deduction of Rs 5.465 billion from NTDC for generation curtailment from Thar coal projects of Engro Thar and Thar Energy Limited due to insufficient evacuation capacity on Thar-Matiari circuit and curtailment of generation in south due to HVDC winter schedule and outage of Dadu-Jamshoro/ Jamshoro-Matiari circuit outage since December 29, 2022.

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When Chairman Nepra sought response from CFO, NTDC, he said that the Authority should also consider ground realities and find a solution. He said, if Nepra deducts Rs 5.465 billion of NTDC, it would be very difficult for the organisation to survive.

Currently, NTDC is taking fresh loans from banks to retire existing loans, CFO NTDC said, adding that an amount of Rs 22 billion is already stuck with the Regulator.

“On one hand, IPPs are imposing Liquidated Damages (LDs) and on the other Nepra is disallowing over Rs 5 billion,” he added.

CFO argued that there were constraints due to which transmission lines were delayed. He said contractor had refused to work due to substantial escalation in cost and rupee depreciation and Covid was also one of the reasons for the delay in completion of work on transmission lines. Jumping into discussion, CEO, CPPA-G Rehan Akhtar noted that generally price escalation clause is included in contracts but in case of NTDC, bidding and award was based on fixed price.

Contractor gave commitment in fixed price but when price escalated, best option for him was declaring him bankrupt by leaving his guarantee or be blacklisted but he opted to discontinue work. NTDC had no option but go for re-bidding, selecting a new contractor which would have consumed more time. After considering the entire scenario, the NTDC Board allowed the contractor escalation clause and subsequently he resumed his work.

Chairman Nepra, in his remarks, stated that he had never known contractors leaving projects incomplete, adding that the maximum the contractor could have done is seek force majeure. He further contended that since NTDC is a public sector organisation, it should have approached the government for remedial measures but it took 12-18 months to understand the issue.

Copyright Business Recorder, 2023