Neelum Jhelum project: Power ministry abandons original transmission line plan

Works on an alternative that could lead to higher cost, spark row with China.

ISLAMABAD:

The Ministry of Water and Power and National Transmission and Dispatch Company (NTDC) have abandoned the original scheme proposed for the Neelum Jhelum transmission line and are working on an alternative plan, which could lead to an increase in cost and spark a dispute with China, officials say.

The original scheme, prepared by renowned British consulting firm Parsons Brinckerhoff in 2010-11, had called for utilising the corridors in mountains for laying transmission lines and employing a high-capacity conductor that could evacuate the electricity produced by all hydropower projects and carry up to 3,500 megawatts.

Now, the government has shelved this plan because of financial crunch and is going to follow an alternative programme, which requires laying of different transmission lines for different power projects, resulting in cost escalation and a row with China, which backed the first scheme.

This comes after two key officials were removed from their positions for the delay in award of the multi-billion-rupee Neelum Jhelum transmission line project to a Chinese firm.

Officials argue that the bureaucrats responsible for the delay in implementing the project had actually found two scapegoats to appease the prime minister. These were Water and Power Development Authority (Wapda) chairman Raghib Ali Shah and the NTDC chief, who were blamed for failure to award the contract.

Earlier, the project was handed over to Wapda, but after sacking its chief, it was again given to the NTDC.

According to officials, China Gezhuba Group Company (CGGC), the successful bidder, had to carry out work on the transmission line according to the original plan. However, the new NTDC board rejected the offer of the bidder.

Tender being split up

Now, the NTDC is executing the project by floating tenders in three lots in an effort to step up work, but it is against Public Procurement Regulatory Authority (PPRA) rules that do not allow any authority to split up the scope of a project being tendered. These questions were already being raised by various forums, officials said.

Since the invitation of tenders for the transmission line, six managing directors of NTDC had been appointed and fired in a span of just two years. They held office for not more than four months and even the present head is dealing with the affairs on a temporary basis.

A commission, constituted on the orders of Supreme Court, had completed the process for appointment of a permanent head with the submission of names of three shortlisted candidates to the Prime Minister’s Office. However, the matter appeared to have been shelved, officials said.

In the beginning, the decision-makers approved the Neelum Jhelum Hydropower Project without considering the fact that after completion it would require a transmission line. Thus, the transmission line, which would travel 270 km, had no financing, which was estimated at Rs22 billion.

Later, the NTDC invited tenders on a buyer’s credit basis in the absence of other funds and bids were opened in August 2012. Though 10 companies purchased tender documents, only two participated in the bidding including CGGC and Iran’s Sunir.

However, the bank guarantee of the Iranian firm was found to be fake and CGGC emerged as the successful bidder.

The transmission line is a complex project that has no precedent in Pakistan. It forms part of a complex network that will emerge after 21 hydropower projects in northern areas and Azad Jammu and Kashmir are completed.

The spokesman for the Ministry of Water and Power could not be reached for comments.

Published in The Express Tribune, May 23^rd, 2014.

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