Pakistan Muslim League –Nawaz is set to add 2000MW electricity to the national grid in the next nine months by resuming work on two abandoned power projects.
According to details by a senior PML-N leader, this is one part of the strategy to meet the power shortage plaguing the country. “Shahbaz Sharif is engaged in negotiations with a Chinese company to resume work on the two abandoned power generation projects in Nandipur and Chicho-ki-Malian to produce a total of 950MW,” he said.
He said the senior PML-N leadership has already spoken to the Punjab sugar mills owners to produce some 900MW electricity by using bagass and assured them of necessary changes in the legal framework for this purpose. Moreover, Chinese contractors have been informed that the government would take every step to facilitate them only if the two projects are completed without any further delay.
On completion, the Nandipur power project (originally costing $329 million) and Chicho-ki-Malian Combined Cycle Power Plant (costing $354.5 million) was to add to the national grid 425MW and 525MW respectively. The Nandipur project was forecast to be completed by April 2011.
In November 2010, the project was suspended due to lack of payments emanating from a stalemate resulting from the refusal of the Law Ministry to concur with the contract ex-post facto. This took place after the Law Ministry had already approved three drafts of the contract, as well as the format of the sovereign guarantees.
As a result, six consignments were stranded at the Karachi and Bin Qasim ports. The foreign currency loans through the export credit agreements (ECAs) became ineffective. Notice for suspension of work was served by Dongfang Electric Corporation Limited China (DEC) and General Electric (GE) on Pakistan Electric Power Company (Pepco), and they demobilised themselves from the site in Nov 2010.
Almost 400 workers sat idle, waiting for the equipment’s customs clearance. Material was kept in the open air at the port and was thus vulnerable to damage. Its ramifications included non-fulfilments of contractual obligations, prolonged delay in commissioning of the project and accrual of additional financial claims from the contractor for idle charges, demurrage charges and loss sustained by determination and damages occurred at the port.
Some time ago, the PML-N took the matter to the Supreme Court, which constituted a commission of inquiry, which held the law ministry responsible and ruled that a loss of Rs120 billion was caused because of non-completion of the two projects.
The apex court ordered stern action against those named as guilty in the commission’s report, but due to official apathy the inaction continued. As a result, the report became just a useless piece of paper.
For the original report, please see http://www.thenews.com.pk/Todays-News-13-23118-Shahbaz-scrambles-to-bring-2,000MW-on-line-in-nine-months