Frustrated with the lethargy of the GENCO Holding Company (GHC) in resolving issues related with the construction of the stalled 425 MW Nandipur power plant in the heart of the power shortages hit, Punjab, the government has directed the company to settle all the lingering issues within a week.
An official source said that the directions were given at a specially convened meeting on June 8 to review the progress of the under implementation projects in the public sector. He said the local banks were asking for a new sovereign guarantee for their loan as the price of the imported machinery has increased. He said the foreign banks were reluctant to release their committed amount without the start of actual work on the site.
More than 60 percent completed project near Gujranwala suffered a delay of more than two years due to inter-ministerial row over legal interpretation, despite the fact that the country is going through prolonged load shedding. The ruling PML-N in Punjab has already accused the federal government of delaying the project intentionally to cause power shortfalls in Punjab because the province is under its rule.
The Economic Coordination Committee of the cabinet had approved the $329 million project in May 2007. The Chinese Dongfang Electric Corporation (DEC) was given the contract of the project in December 2007. It will be one of the most cost efficient power plant in the public sector as 150 mmcfd of gas is committed for it, the source added.
The project came to a halt even though three gas turbines and generators were placed on their foundations and major portion of civil works for the plant and equipment was completed. The project plant and machinery arrived at the Karachi port in April 2010. The plant and machinery valuing $80 million is lying at Karachi port and the contractor has claimed $20 million for inspecting, testing, repairing and re-purchase of the damaged plants.
GHC was directed to immediately resolve the issue, the source said adding that as the same model will be applied later on for resolving the 525 MW Chichon-Ki-Malian Combined Cycle Power Plant which is estimated to cost $ 354.5 million. He said GHC has been asked to resolve the issue so that the release of the withheld amount by the local banks is made to restart the project.
The source said that the commissioning date for the first gas turbine of 95 MW will be rescheduled to October 2012 from the contractual commissioning of October 2010. Dates for the second and third gas turbines of 95.4MW each and for the fourth combined cycle turbine of 139 MW will also have to be rescheduled. As per the actual plan the project was to be completed in 2011.
