The Public Account Committee (PAC) Thursday expressed serious anger over the delay in the completion of Naulong Dam project in Balochistan and the project cost escalation, and directed the Ministry of Energy, the Power Division, and the Water and Power Development Authority (Wapda) to make all-out efforts for early construction of the dam.
The officials while briefing the panel, which met under the chairmanship of Syed Khursheed Ahmad Shah, said that the bids were invited in April 2010 and four firms submitted their bids wherein two firms M/s DESCON Engineering & M/s SMADB were technically qualified. M/s DESCON Engineering was the lowest bidder (Rs 12.195 billion).
The contract was awarded after two years due to funds constraints, so the contractor did not accept the award on the bid price and asked for revision of the rates, which authority did not agree and it finally annulled the bidding process.
The original PC-1 of Rs 11.7 billion was approved by ECNEC in September 2009, consequently bids were invited in April 2010. The 1st revised PC-I of Rs 18.028 was approved by ECNEC in August 2012 and 2nd time bidding process (2013-14) was approved by ECNEC in August 2012. The bids were re-invited in July 2013. Four firms submitted their bids wherein M/s DESCON was only technically qualified firm.
Since the bid price of M/s DESCON was unreasonably high (Rs 28.211 billion) as compared to the approved PC-1 (Rs 18.028 billion), therefore, Wapda on the advice of Planning Commission annulled the bidding process in January 2015. Bids were again invited in March 2015, wherein three firms submitted their bids and two firms were technically qualified. M/s DESCON Engineering was the lowest bidder quoting bid price of Rs 19.941 billion.
Accordingly, the Letter of Acceptance (LoA) was issued to 1st lowest bidder M/s DESCON on 31.07.2015. The contract could not be signed due to funds constraints. In the meantime, the 2nd revised PC-I amounting to Rs 26.547 billion based on the lowest bid was prepared and submitted for consideration by the CDWP which was discussed in January 2016, wherein the concept of the project was cleared with the direction to arrange funds outside the PSDP.
Finally the authority annulled the bidding process and requested EAD through MoW&P to explore the funding arrangements from other sources out of PSDP. Khursheed Shah said what steps the government has taken after the 25th July 2017 directions to Secretary Ministry of Water and Power & Secretary Ministry of Planning, Development & Reform for sanction of funds to the completion of installation of pilot treatment plant and Naulong dam project on urgent basis and progress in the matter be communicated to PAC on quarterly basis.
The officials briefing the current status of the project informed the panel that as per aide-memorie-02 of the Asian Development Bank (ADB), the project component-3 command area development, drinking water supply, land acquisition and security arrangements will be carried out by the government of Balochistan.
In a meeting of Economic Affairs Division (EAD) on 26th July 2017, the issue of implementation of the project was discussed and the meeting decided to make coordination arrangements among the federal and provincial governments in order to secure the anticipated ADB financing for Naulong dam project.
In the follow-up, the EAD through their letters dated 3rd August & 5th September, 2017 requested the government of Balochistan to confirm the execution of their own component and preparedness to takeover the project for O&M after completion of three years. The officials said that the Asian Development Bank (ADB) showed interest for financing of the Project and sent consultation mission for the project appraisal during 4-19 September 2016 and 11-16 May 2017.
The ADB informed that they will finance the project subject to updation of project documents, fresh procurement of contractor & consultants and suggested action plan for Wapda/Consultants and tthe government of Balochistan. The ADB through its Aide-Memoire-02 raised the observations on design aspects (spillway & life of dam) with respect to flood assessment and MoW&P also raised the observations regarding sediment inflows at Mula River.
In response, Wapda through consultants has been carried out a careful review of the design and conveyed to the MoW&P and ADB that there is no deficiency in design of the project and shared the details with ADB & MoW&P. No further observation regarding design aspect of the project from MoW&P and ADB was received by Wapda.
During the meeting held on 26th July 2017, the MoW&P desired that the funds allocated by ADB for Naulong dam project may be diverted to other ongoing projects; in case no response received from the government of Balochistan for the execution of their own component. Subsequently, Wapda vide letter dated 27th September 2017 requested the MoW&P for review the stance for stopping the expenditure on Naulong Dam project, considering the completion of ongoing studies as proposed by the ADB and further directives of PAC of dated 25th July 2017 as mentioned above.
Following the letters from EAD as mentioned above planning and development department of the government of Balochistan on dated 3rd October 2017 has requested secretary irrigation and secretary agriculture Balochistan to submit the detailed report along with recommendations. However, the clear stance of the government of Balochistan on the subject matter is still awaited.
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