Power transmission lines: ECC goes for pricey scheme, shelves cheaper one

Move could lead to a dispute with Chinese bidder, project cost will rise.

ISLAMABAD:

The Economic Coordination Committee (ECC) has given the go-ahead to an alternative but controversial plan to lay transmission lines for transporting electricity from the Neelum Jhelum hydropower project, a move that will push up cost and spark dispute with China, sources say.

Under the original scheme, designed by renowned British consulting firm Parsons Brinckerhoff in 2010-11 that has now been shelved, mountain corridors were to be utilised for laying the transmission lines and employing a high-capacity conductor that could transmit the electricity produced by all hydropower projects and carry up to 3,500 megawatts.

The project was estimated to cost Rs22.5 billion and awarded to China Gezhuba Group Company (CGGC), the successful bidder, which had to undertake work on the transmission lines.



However, a new board of the National Transmission and Dispatch Company (NTDC), constituted by the PML-N government after coming to power last year, rejected the bidder’s offer.

Afterwards, the NTDC management started the process anew and came up with an alternative plan for transmitting power from the Neelum Jhelum project at a cost of Rs21.27 billion. Under this plan, separate transmission lines would be laid for other hydropower projects, resulting in escalation of the cost of carrying 3,500MW of electricity.

According to sources, the ECC in its meeting held on August 15 approved, in principle, the Plan-B of laying the transmission lines at a cost of Rs21.69 billion with foreign exchange component of Rs11.27 billion.

Meeting participants told the ECC that bids had been processed and were under evaluation, adding funds were not available and the NTDC decided to execute the project with the help of its own resources.

The Ministry of Water and Power, however, said commercial banks were willing to provide Rs17 billion against sovereign guarantees.

The laying of transmission lines 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.

Since the tenders for the transmission lines were invited, 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.

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

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

According to the prime minister’s directive, first unit of the 969MW Neelum Jhelum hydropower project will start running by December 2015 and for that the NTDC would have to complete the transmission lines before the end of September 2015 to pave the way for power transmission to the national grid.

Published in The Express Tribune, September 4^th, 2014.

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