Power project: rules may be eased for Chinese firm
By Our Staff Reporter
ISLAMABAD, Feb 8: The government is likely to provide a Chinese firm with sovereign guarantees of $1.6 billion for construction of the 969mw Neelum-Jhelum hydropower project because no other contender is available, it is learnt.
Informed sources in the water and power ministry told Dawn that the government was also in the process of relaxing certain conditions to accept the bid of China International Water and Electric Corporation (Ciwec).
The Chinese company has demanded that the condition of providing ‘supplier’s credit’ should be replaced with ‘buyer’s credit’ so that it could arrange finances from anywhere in the world in addition to the Chinese government.
The sources said that a summary had been sent to the Economic Coordination Committee of the cabinet to replace the condition aimed at providing the supplier’s credit of about $1 billion through buyer’s credit.
Pakistan had re-advertised the project last year following a poor response to initial bidding, but results remained unchanged. The only difference is that Pakistan lost more than 15 months in the process while India kept on working on its controversial Kishanganga project.
A French contender, Vinci International, had backed out of the bidding process quoting ‘structural disturbances’ in the soil owing to the Oct 8 quake and called for re-survey and seismic investigation of the area.
The government received only two bids in the international competitive bidding for the project. M/s China Mechanical Electric Company had also submitted a bid but without completing legal formalities and bid bond.
The Ciwec management is currently holding meetings with the president, prime minister and other senior authorities to get the Neelum-Jhelum project going.
The project is of strategic importance as it could protect Pakistan’s priority rights over Neelum waters besides producing cheap electricity.
India is constructing the Kishanganga hydropower and water storage project on the same river upstream and Pakistan considers it a violation of the bilateral Indus Waters Treaty. India has already built 75 per cent of a 22km tunnel of the project.
If Pakistan does not make reasonable progress on the Neelum-Jhelum project, it will be obliged to allow India to continue with the Kishanganga project.
The Neelum-Jhelum project is of a unique nature technically. About 98 per cent of its structure will be underground, including a 41km tunnel, a power house and the transmission system. The remaining two per cent — inlet and outlet of the water tunnel – could be seen on ground. The tunnel will be about 300 meter below the riverbed.
