Bid-losing: Austrian firm still trying to win Tarbela dam

Company working to win the green signal for fifth extension hydropower project.

LAHORE:

An Austrian company is trying to secure a contract for Tarbela’s fifth extension hydropower project, despite having lost its tender in the past.

Andritz Hydro could not get the contract through competitive bidding as it earlier lost the tender by a big margin in Tarbela’s fourth extension hydropower project. Its bid amounted to more than $40 million higher than what was given by its German competitor Voith Hydro.

Andritz Hydro, in collusion with Wapda and its chairman Syed Raghib Shah, is working to give the green signal for the project. The project consultant has also recommended the Austrian company for the contract in its concept paper.

Shah has signed a consent letter with OEKB, (Austrian Control Bank) for the funding of the project, which is conditional to the involvement of the World Bank.

Sources familiar with the matter, however, said it is unlikely that the World Bank will involve itself in this project as it is not transparent and is limited only to an Austrian company. They added that bilateral funding is usually signed by the economic affairs division and the finance ministry and not by the head of a government department.

The economic affairs division has raised several objections in awarding this contract to Andritz Hydro. The contents of an office memorandum titled “Austrian Financing for Tarbela 5” reads that the undersigned is directed to refer to the water and power ministry’s letter on the captioned subject and to say that in accordance with the planning commission’s guidelines, foreign donors cannot be approached for financing a project without the approval of the project of PC-I.

It also says that in cases of emergency, the clearance of the concept should be sought from the appropriate forum, Central Development Working Party (CDWP).

“I have been directed to request that this division may please be informed as soon as the concept clearance is accorded by the CDWP,” the letter stated. “I have been further directed to request that the comments may please be provided on the urgency for initiating the negotiation with Austria on the basis of the concept clearance from the competent forum.”

After receiving the letter, the water and power ministry also sought the views of the Wapda chairman regarding the decision to exclude others. Instead of following directions, Shah issued a consent letter in favour of the Austrian firm.

The extracts of the letter signed by Shah and board member of OEKB Rudolf Scholten, stated that the government of Pakistan through Wapda has suggested certain projects to the Austrian government for financing and turnkey execution under prevailing tendering rules.

One of these projects is the Tarbela fifth extension project where OeKB , on behalf of the Austrian government, is willing to consider financing in conjunction with the World Bank.

Austria has offered attractive terms under its export and investment promotion scheme which is backed by the Austrian government.

While talking to The Express Tribune, sources familiar with the matter raised questions about the process of awarding the contract, asking which rule allows the Wapda chairman to contact a private company.

When The Express Tribune contacted Wapda’s public relations director Rana Abid, he said that Wapda performs its functions strictly in accordance with the policies and provisions of the Wapda Act and the rules made thereunder.

According to him, the Tarbela fifth extension hydropower project is of immense importance in view of the acute electricity shortages in the country. Therefore, all activities are being undertaken simultaneously for its execution in the shortest possible time.

The CDWP has accorded the project approval concept in its meeting in mid-January this year, while the study is being carried out as per the relevant rules, Wapda spokesman said.

Published in The Express Tribune, February 15^th, 2014.

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