Transmission sector: World Bank concerned at delay in approval of contract extensions
ISLAMABAD: The World Bank (WB) has expressed concern at the outstanding delays in approvals of extensions in contracts which may cause implementation delays and result in works being undertaken outside of the requisite contract, legal framework and without the necessary insurance cover, well informed sources in NTDC told Business Recorder.
These concerns were conveyed by the Bank’s Technical Mission led by Muhammad Anis, which visited sites and held meeting on the National Transmission Modernisation Project-1 (NTMP-1) during July 22- August 3, 2024.
The Bank’s team appreciated Power Division and the National Transmission and Dispatch Company for their continued support in advancing the implementation of the World Bank-financed NTMP-1.
The team acknowledged the efforts of NTDC and the NTMP-1 Project Management Unit (PMU) in maintaining steady progress towards achieving the project development objective of increasing the capacity and reliability of selected segments of the national transmission system in Pakistan and modernize key business processes of NTDC.
Apart from the technical discussions on the contract-wise progress, visits were carried out at key project sites where substation capacity upgrades are being implemented to improve supply reliability and availability.
The Bank’s team in its findings has stated that based on the findings of the site visits and information provided by NTDC during the mission, most of the equipment for the substation upgrade works have been delivered to site and are pending shutdowns to complete the installations and commissioning activities. World Bank team has requested NTDC for close attention and follow up to ensure that the required shutdowns are carried out as soon as the network load reduces during the next winter.
On Islamabad West Substation (IWS), World Bank has commended NTDC for the efforts that led to the IWS substation contract being declared effective during the mission. To ensure smooth implementation progress, the team sought top brass of NTDC’s support in ensuring that any pending land compensation payments are completed in a timely manner.
Discussing transmission line for 500-KV Nowshera Substation, World Bank team cited NTDC as saying that there are four towers (out of seven) for the in/ out transmission line to connect the Nowshera substation to the grid that are facing right-of-way issues. NTDC is engaging with the landowners and has assured the Bank that the issues will be resolved in a timely manner so that the transmission line can be completed and commissioned by December 2024. NTDC’s top brass has been requested for support in ensuring that the pending right-of-way issues for this line are promptly addressed.
Offering comments on NTDC’s Enterprise Resource Planning (ERP) and Modernisation of Business Processes, the World Bank stated that the ERP and business process modernisation activity are progressing well according to the report provided by NTDC.
The Mission noted that the activity is scheduled to go live in September 2024. As highlighted during Bank’s last supervision Mission in March 2024, the disbursements from this activity were significantly lagging the physical progress. Also, it was not clear how the change management from the current manual processes to the automated process supported by the ERP tool will be managed to ensure seamless transition.
The World Bank team sought support from NTDC’s top management to ensure that an appropriate change management process is followed for the activity’s long-term objectives to be fulfilled.
Offering comments on contract/ change order management, the Bank’s team also discussed the long outstanding issue related to the contracts with outstanding approvals for time extensions and it was noted that several contracts have outstanding approvals for contract extensions, some that go back to more than 12 months.
As per best practice, extensions are supposed to be done before the expiration of the contracts. This is a matter of serious concern as it might cause implementation delays and result in works being undertaken outside of the requisite contract legal frameworks and without the necessary insurance cover.
In this regard, the team requested the Power Division and NTDC to ensure that all the outstanding approvals for time extensions are reviewed and issued before mid-September 2024.
Copyright Business Recorder, 2024
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