LAHORE, Dec 19: The Water and Power Development Authority has issued the Letter of Intent to the Pakistan Engineering Company for the manufacture of 500 KV electricity towers.

Wapda had called international tenders to award the contract for the Rs376 million project of building electricity towers for laying a 500-KV transmission line between Rawat and Lahore.

Peco submitted the lowest bid.

The contract for laying the transmission line from Ghazi Barotha to Rawat has reportedly been awarded to a Saudi firm.

The Peco has been under a heavy debt and is unable even to regularly pay the salaries to its employees.

The Peco management claimed that negotiations were also underway for fabricating communication towers for the Pakistan Telecommunication Company Limited and that a contract was expected to be signed soon.

The Privatization Commission has been trying to sell Peco’s Badami Bagh Works land to pay the bank loans and other liabilities and a pre-bid conference has been scheduled for Jan 24. The date for bidding is Jan 28.

The PC had earlier tried to sell the company’s assets in 1999. But, it failed to attract buyers due to the low returns in the engineering sector.

Peco, earlier known as the Beco (Batala Engineering Company), had been established by Chaudhry Muhammad Latif on a 260-kanal plot in Badami Bagh in 1948. Under an agreement with the then government, Mr Latif later got a piece of land in Kot Lakhpat and set up a bicycle fabrication unit there in 1960.

The unit was nationalized by the PPP government. It enjoyed sound financial health until 1989. In 1990 it incurred losses for the first time. The State Bank of Pakistan declared the Peco a defaulter in 1993, barring all financial institutions from extending credit to the company. In 1994, the PC presented its restructuring plan.

Under this plan downsizing was introduced in the Peco, the machinery shifted from Badami Bagh Works to Kot Lakhpat and the Badami Bagh land put up for sale.

Major products of the Peco were tower fabrication, steel ingots, power looms, concrete mixers, electric motors and pumps, and machine tools.