The signing ceremony of 525MW thermal power plant at Chichoki Mallian has been postponed till Tuesday (today) when the new Cabinet will hold its first meting, to be chaired by Prime Minister Yousuf Raza Gilani, sources in the PPIB told Business Recorder.
The project cost has been revised to $354.5 million after negotiations between the Pepco Board and Chinese company Dong Fong on March 17, the sources added. The sources said that the ceremony had to be held on Monday but now it is set for Tuesday at 5pm in the Prime Minister Secretariat.
The PPIB Board has been briefed recently that originally 500 MW Chichoki Mallian combined cycle project was being developed by Wapda. However, Prime Minister, in a meeting on February 13, 2007 decided to shift the project to Qatar Investment Authority (QIA) including Alstom-Marubini.
QIA submitted its EoI in September 2007. The board approved the project under the fast track initiative and the PPIB requested the sponsors to approach Nepra for filing a tariff petition by November 15. The sources said that ECC, in its meeting on October 31 last approved 90 mmcfd gas on nine-month basis from SNGPL for the project subject to meeting the deadline of November 30, 2007 for execution of the project.
Dong Fong was already in the process of setting up thermal power plant of 450-500 MW at Nandipur (Gujranwala), despite objection by Euro Dynamics International, a Lahore-based firm that the second lowest bidder joint venture of Chinese company does not meet the qualification and requirement of combined cycle plant.
The ECC, in its meeting on October 31, 2007 had directed the Ministry of Water and Power to issue a notice to the proposed sponsors including Alstom-Marubini and QIA to come up with a deadline as to when they intend to file an application to the Nepra for tariff fixation and project completion to avoid further delay. The GoP wrote several letters to QIA but to no avail despite the fact that gas allocation deadline of November 30, 2007 had expired.
Now the government has decided to award the contract to Dong Fong on same terms and conditions applicable to 42 combined cycle power plants. Though, the ECC had approved allocation of the project to the Chinese company, it may attract criticism from those who have been left out.