ISLAMABAD, Oct 21: The military government is sending federal secretary of water and power to Saudi Arabia to seek withdrawal of a penalty imposed on a state-owned company for delaying a project contract.

Saudi Arabia has imposed a Rs10 million penalty on National Power Construction Company (NPCC) for delaying a multi-million dollar Wadi Jalil power project, official sources confirmed to Dawn.

“Federal secretary of water and power Mirza Hamid Hassan is leaving for Riyadh today (Monday) to persuade Saudi Authorities on behalf of the government of Pakistan to withdraw the penalty on the assurance that there would be no further delay”, a senior government official said.

National Power Construction Company (NPCC), a wholly state- owned Pakistani company, could not complete a mega power project Wadi Jalil in time. Under the agreement, a penalty as a percentage of contract price was imposed by Saudi authorities on NPCC for delaying the project.

Ejaz Hussain Malik who is heading the NPCC as managing director for over a decade now, had recently sought federal government’s intervention following the delay in the project and Saudi decision to impose penalty, official sources said.

The company has large power sector business operations in Arab States but primarily in the Saudi Arabia. The government is now planning to privatize the NPCC through sale of shares.

This is for the second time in the last two years that a penalty has been imposed on Pakistan by Arab states. Last year, Pakistan’s ministry of petroleum and natural resources paid a $50 million penalty to UAE government for Pak-Arab Refinery Limited.

A senior government official hoped that Saudi authorities would not press for the penalty in a commercial deal in view of the friendly relations between the two countries.