ISLAMABAD:
The federal government has voiced its anger over what it calls interference by Punjab in implementing the 425-megawatt Nandipur power project as its cost has jumped 47% from earlier estimates.
Tension between the federal government and Punjab erupted over the power project in a meeting of the cabinet on September 22, officials said.
During the deliberations, Water and Power Minister Khawaja Muhammad Asif hit out at the Punjab government for meddling in affairs pertaining to the Nandipur project.
“The Punjab government does not listen to me and I am helpless in the case of Nandipur power project,” an official quoted Asif as saying. He protested and walked out of the meeting.
The cost of the project, shut down for months with power production cost at Rs41 per unit, has come in for strong criticism as it has gone up to Rs84 billion compared to earlier estimate of Rs57 billion.
A former managing director of Pakistan Electric Power Company (Pepco) also wrote a letter to the Supreme Court, calling the cost surge a white collar scam following a revised deal with a Chinese contractor.
According to officials, the Ministry of Water and Power, which was upset about the criticism, insisted that it had only mobilised the Chinese contractor and all negotiations were made by Project Director Mohammad Mehmood.
“The water and power ministry has nothing to do with the revised deal with the Chinese contractor,” the official quoted the ministry as saying.
In the last week of September, the National Electric Power Regulatory Authority (Nepra) held a public hearing of a petition filed by Northern Generation Power Company for setting the rate of tariff for electricity to be generated by the Nandipur powerhouse.
During the hearing, it was disclosed that the project cost had gone up sharply to Rs84 billion, a cause for concern for the regulator.
Project Managing Director Mohammad Mehmood pleaded that the cost soared mainly because of an inordinate delay in executing the project. The machinery for the power plant was kept at the Port Qasim for a long time where it lost its efficiency, he said.
He also called for setting the tariff at Rs41 per unit for electricity generated by diesel, Rs26 for furnace oil-based electricity and Rs12.47 for gas-based power production. The MD said if the project was not completed, then the government would have to suffer a loss of Rs38 billion.
Published in The Express Tribune, October 10th, 2014.
Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.
COMMENTS (18)
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ
@saleem khan:Pakistanis are not compitant to to make Railway engine having a factory to manufacture; carriage and wagon shop stopped production of carriages all because Pakistani engineers failed. Nandipur requires genius engineers. We have dearth of REAL Engineers so last hope China ,please don't hush hush them. Same is the case with decision makers having no clue of the job. They have no clue of practical engineering. Colarado Dam in USA was built in almost 4 years. Our so called planners/ engineers can not imagine what Colarado dam has done- ( search internet about this dam)
MD of Nandipur PP says that the machinery remained in Port Qasim so it lost its efficiency,.I wonder, how iron.steel and other metals converted in machinery and lied packed can loose its efficiency. Will the MD elaborate his technical findings. Please MD do not try to throw vague statements.
Wait and you will see what Chinese contractors will do in Pakistan in future. long live our friendship!!!
@Sodomite:
You do realize what sodomite means?
@Saleem: Sorry, now PPP is not in government. Therefore, SC is unable to interfere.
The people who should be blamed and jailed are the PPP-Z for deliberately delaying this project for years............but PML-N and PPP-Z and both in bed together with a ' I scratch your back and you scratch mine ' philosophy.
Fooling the public. How can big brother and little brother have different views on this same project.
Sham Democracy suits Political Parties, Judiciary and Bureaucracy. All the exchequer money rotates between the them.
One need courage to deliver but if you have share or % then only loud mouth works nothing else,our politicians and technical reps or consultant from WAPDA,ministry of power and finance works with full understanding to fleece people's/public money through private sector.You will see no leadership or honesty at any stage of agreement from any one.Now all are convinced that eating public is HALAL.
Oh dear oh dear
Rs.41 per unit next year we will produce electricity at Rs. 70 per unit. this is economic dhamaka we always hear of. thanks to the emperor.Democracy cry democracy.
The state of the Nandipur Power Project tells us about the seriousness of the government in solving the energy crisis. The government does not see further than their noses, otherwise much could have been done during this time about the energy crisis.
Well done...Pkr 41 / unit: even rental power plants were cheaper than that...
Rs 41 is HSD cost, but production has bene on furnace oil, not HSD and will on gas soon.
when the people in the same govt don't listen to the partners in the federal govt. this is called family rule. #GoNawazGo
i don't know why but I have no doubt or second thoughts about Khawaja Asif' claim of Shahbaz meddling everywhere as long as it's inside the territory of Punjab; no mater who, what or where.., it's his property and must be brought under his men.
Worth making a loss of Rs38B instead of Rs.84B. Its a non-viable project. Ditch it now.
41 rupees per unit is acceptable for Nandipur while they turn down a 6 rupees per unit proposal of KP calling it expensive!!
It is a shame that SC is sitting on sidelines and watching this drama unfold. It needs to interfere and instruct NAB to probe whether any laws were broken, or fleecing by those involved occured. If so, those responsible for doing so must be punished.