ISLAMABAD: The World Bank is likely to approve the restructuring of National Transmission Modernization Project-I (NTMP-I) worth $425 million envisaging to increase the capacity and reliability of select segments of the national transmission system in Pakistan and modernise key business processes of the National Transmission and Dispatch Company.
Official documents revealed this is the third restructuring of the project and the second step in a two-stage extension plan.
The proposed restructuring will extend the closing date of the project by an additional 20 months, from April 30, 2025 to December 31, 2026. The project has previously undergone two restructurings.
The first restructuring done in October 2023, added a withdrawal category in the Financing Agreement to allow the capitalization of the commitment charges and interest during construction.
The second restructuring done in January 2024, extended the project closing date by 15 months, from January 31, 2024 to April 30, 2025.
NTMP-I was approved by the World Bank’s Board of Directors on December 19, 2017 to support the expansion and upgrade of the country’s transmission network (Component A), the deployment of an Enterprise Resource Planning (ERP) System for the National Transmission andDespatch Company (NTDC) (Component B), and to provide technical assistance for the strengthening of NTDC’s planning, operations and maintenance capability, and modernizing of NTDC’s key business processes (Component C).
The project disbursement rate currently stands at 39.1 percent, i.e. $166.39 million has been disbursed out of a total credit commitment of $425 million hitherto.
The disbursement ratio is expected to increase to more than 60 percent by the end of calendar year 2025 as the implementation of the ongoing activities advances further. The project development objective and implementation progress are both rated “moderately satisfactory”.
Since the last restructuring in January 2024, overall project implementation has progressed significantly, and the project has disbursed more than $80 million.
Further disbursements amounting to roughly $20 million are expected by the end of fiscal year 2025. The largest works contract, the IWS package, which has a contract price of $180 million, was awarded in May 2024 and is scheduled for completion in December 2026.
Furthermore, compensation payments for the land that has been acquired for the IWS has reached more than 93 percent, with the remaining unpaid compensations due to absentee project affected persons and cases that are before the courts. Based on the current progress, it is expected that all pending compensation cases will be resolved within the proposed extension period.
Component A (US$455.89 million – IBRD $344.56 million + NTDC $111.33 million): Expansion and upgrade of the transmission network. This component supports the: (a) expansion, augmentation, and upgrade of selected 500kV and 220kV transmission substations and associated lines; (b) construction of 500kV and 220kV new transmission lines; and (iii) construction of 765kV, 500kV, and 220kV new transmission substations.
All major contracts under this component have been awarded and are progressing well. Eleven of the 14 contracts with a total contract amount to about US$95 million are scheduled for commissioning before the end of fiscal year 2025 (FY-25). The IWS contractor has completed mobilizing, and construction activities have started and are on track for completion within the 30-month period contract period.
Component B (IBRD US$29.46 million): Deployment of Enterprise Resource Planning (ERP) System. This component supports the first ERP investment for NTDC. This involves investments and technical assistance (TA) for the modernization of NTDC’s Information and Communication Technology infrastructure and the development and deployment of an ERP system with the aim of strengthening NTDC’s managerial, commercial, and operational capabilities.
Implementation of the ERP program is progressing well. Progress related to the supply and commissioning of ERP hardware and network equipment is on track and has reached more than 80 percent. The entire ERP system is expected to “go-live” before December 2025.
Component C (IBRD $20 million): Project management, technical assistance and capacity building. This component supports: (a) project management and implementation support services; (b) strengthening of NTDC’s planning, operations, and maintenance capability to accommodate new thermal and renewable energy generation; (c) modernization of NTDC’s key business processes; (d) preparation of new investments; and (e) other priority TA activities and capacity building support agreed between the NTDC and the World Bank.
Implementation of the activities under this component including construction supervision of component A is progressing satisfactorily. The comprehensive system study of NTDC’s power system, the key study under this component, is in the final stages of completion.
While other contracts that are yet to be completed will benefit for the proposed restructuring, the main rationale for this restructuring is to allow sufficient time for the completion and commissioning of the IWS works contract that is expected for completion in December 2026. The IWS is essential for evacuation of power from the Bankfinanced Dasu Hydropower Plant (P121507), which is scheduled for commissioning in late 2027.
The conditions for the second extension, which include the award of the IWS contract, acceptable progress towards completing RAP payments for IWS, and acceptable progress in completing other contracts under component A, have been substantially met.
The extension will facilitate the completion of the IWS and other ongoing key contracts such and Nowshera substation so that the project can meet its intended development objective.
The implementation delays that necessitated the project extensions were caused by the COVID-19 pandemic restrictions; internal processing bottlenecks within NTDC, and land/right-of-way acquisition challenges.
Copyright Business Recorder, 2025
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