FRIDAY FEBRUARY 20: Power transmission line project: contract annulled in controversial circumstances

ISLAMABAD: Senate Standing Committee on Water and Power on Thursday annulled the contract of 106 MW Golen Gol transmission line project worth Rs 3.44 billion with only three members present in the meeting, including Chairman, out of a 14-member committee and without advice from Law Ministry and Public Procurement Regulatory Authority (PPRA). Chairman Standing Committee, Zahid Khan who is retiring in two weeks and Senator Nisar Mohmand hailing from PML (N) were on the same page with respect to annulment of contract whereas Senator Khalida Parveen remained silent.
Federal Minister for Water and Power, Khawaja Asif and Minister of State, Abid Sher Ali did not attend the meeting in the aftermath of exchange of hot words between Minister of Sate and Chairman Standing Committee Zahid Khan in a recent joint meeting of three Standing Committees.
Additional Secretary Incharge Ministry of Water and Power, Younus Dagha and Chairman Water and Power Development Authority (Wapda) tried to convince both the "warring" Senators that the committee should seek legal opinion from the Ministry of Law and Justice and PPRA prior to annulling the transmission line project, as annulment would complicate the matter.
Zahid Khan and Nisar Mohmand rejected the report of Chairman Wapda pertaining to the contract of Golen Gol transmission line project, saying that the project was awarded in violation of PPRA rules and other bidders were pressurized to withdraw their bids. Ministry of Water and Power and Wapda maintained that the project was awarded in accordance with PPRA rules.
Both the top officials argued that in case the government scraps the project, the firm may seek legal remedy which will delay the project. However, the committee did not pay heed to the suggestion. Senator Zahid Khan said he has already consulted legal minds.
"I have taken the decision which cannot be changed now. You do whatever you can," said Zahid Khan addressing Additional Secretary Incharge Younus Dagha and Chairman Wapda Zafar Mehmood. Ministry of Water and Power and Wapda hinted that they too would seek a legal opinion on the decision of Standing Committee after it lands in the Ministry.
Organisation of Petroleum Exporting Countries (OPEC) is financing the project whereas Wapda had awarded the project to M/s Netracon-NEIE/Holley Consortium which is engaged in similar projects in other countries.
Managing Director Nandipur Project, Mehmood Ahmand informed the committee that out of four turbines three have been commissioned. According to him, the current generation capacity of the project is 300MW. He further stated that cost of project has increased to Rs 58.6 billion from Rs 23 billion whereas per unit cost will be Rs 18. Senator Mohsin Leghari and Senator Nisar Mohmand expressed reservations on the cost escalation. They argued that the project which was initiated in 2008 is unlikely to be completed in the near future.
Managing Director Nandipur Project disclosed that "we had been directed by phone that a policy should be formulated in three days, and we had to implement the policy". The Standing Committee stated that employees should perform for the state and not as personal employee of anybody.
He assured the committee that the project will be completed by June 30, 2015. Committee members warned that if the project is delayed, the matter will be sent to National Accountability Bureau (NAB). Briefing on coal fired power plants, acting Managing Director Shah Jahan informed the committee that China will invest in coal fired project in Gaddani because of jetty, adding that other countries are not funding coal projects because of environmental issues.
Senator Mohsin Leghari said infrastructure is not available for coal power plants in Sahiwal, Muzaffargarh and Rahimyar Khan, suggesting that the government should establish coal projects in areas contiguous to coal supply. Chairman Wapda informed the committee that two coal-fired projects of 1320 MW will be established in block I and II of Thar. He further stated that 300MW project will also be established in the salt range.
Additional Secretary Incharge Water and Power Ministry said the financial close of M/s Engro's coal power project will be completed very soon. Briefing the committee on much delayed 696 MW Neelum Jhelum Hydropower Project, Chairman Wapda said that $475 million financing is required to complete the project by November 2016 if $475 million funding gap in resources is bridged. Wapda will submit the revised PC-1 of Neelum Jhelum Hydropower Project after including all those costs which were ignored previously.
He said work on the Neelum-Jhelum Hydropower Project started before achieving financial close due to which funding could not be arranged. "We are estimating revised costs including interest during construction which was not made part of the PC-I," he maintained. Finance Minister Ishaq Dar, he said, has directed Wapda to work out revised costs very carefully and assured that financing would be arranged. Chairman Wapda further stated that China Exim Bank and Kuwait Fund have agreed to extend $300 and $32 million, respectively, for the project.