The Board of Investment (BoI) has failed to arrange parleys between the Qatari Investment Authority (QIA) and the Water and Power Ministry for revival of expired memorandum of understanding (MoU) signed for setting up 500 MW Chichoki Mallian Power Project, informed sources in BoI told Business Recorder.
The MoU was signed during the visit of the Qatari finance minister to Islamabad on May 31 in the Prime Minister House, but it expired on July 31, as the sponsors did not finalise negotiations with the EPC contractors i.e. Marubeni of Japan.
Sources said that visible hurdles were being witnessed from the day one when the Private Power Infrastructure Board (PPIB) blocked the signing of agreement between the QIA and GoP, saying that some of the clauses were not acceptable. The PPIB was also of the view that it was not being properly consulted on the proposed financing plan by the QIA.
They said the QIA delegation was already in the capital and discussing the pending issues with the BoI officials but most interesting aspects of these deliberations were that the delegation did not quote project price so far which is the basis for taking the project ahead and fixing tariff.
The company initially quoted $350 million project cost but BoI claimed that it has been enhanced to $525 million without giving any justification, said the sources. Sources said that BoI had approached the Water and Power Ministry for a meeting with the delegation for which Water and Power Secretary Ismail Qureshi gave go-ahead signal.
However, On Saturday, BoI asked the ministry to cancel the hurriedly called meeting, citing the delegation remarks that they did not get project price from the contractors.
Now the question arises, if QIA did not quote price then who conveyed the revised price of $525 million despite the fact that the company earlier quoted $350 million. Sources also said the Wapda adviser (thermal) visited London from July 19-24 to discuss technical issues with the QIA and HSBC. During the meeting, all technical issues were amicably resolved and settled, claimed Wapda Member (power) Fazal Ahmad Khan.
Regarding updated progress on the project, he was of the view that QIA was negotiating the price with the EPC contractor on its own and the utility was unaware of any progress. Issues discussed in London's meeting are; year round use of well water, site drawings, lay down/temporary areas, relocation of houses, early access to site and road, project site, existing services, storm water and other discharges, overhead lines (66 kV) and gas specifications.
Sources said Wapda has confirmed that the discharge route to the scarp canal does not exceed 500 m length and the utility would provide free access over its owned part of the route and ensure that contractor has suitable access to road crossing, etc for the balance of the route.
The exact route of discharge connection is at contractor's choice and selected route to be confirmed from Wapda by the time to start of site work.
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