ISLAMABAD: Political tension in the federal capital compelled the government on Wednesday to postpone for more than month the bidding for 10 coal based power projects of 6600mw capacity at Gadani.

The Board of Directors of Private Power and Infrastructure Board (PPIB) “approved the extension in closing date by September 29, 2014 so that a healthy competition is generated,” said an official statement after the meeting presided over by Minister for Water and Power Khwaja Mohammad Asif.

Board meeting was postponed twice over the last 10 days due to security situation in Islamabad and resultant unavailability of the board members.

Previously, the last date for the expression of interests (EoIs) was set as August 18 for the 10 projects of 660MW each to be located at Gadani Power Park but only three companies turned up with their proposals.

An official said the extension in deadline should have been announced before the last day (i.e. August 18) under the law but this requirement could not be met due to unavoidable circumstances.

But insiders said the government was equally responsible for the poor investor response. The government had earlier registered foreign companies for setting up of all the 10 power projects at Gadani through negotiated memoranda of understanding (MoUs). These registered firms had also deposited earnest money in foreign exchange. It was, however, pointed out that such negotiated route was not permissible under the existing laws.

PPIB seeks extension in EoIs submission deadline till September 29 to enable all applicants and fresh firms to prepare their proposals

The government belatedly decided to follow public procurement rules and EoIs to ensure transparency. It asked the already registered firms to send their EoIs and their previous earnest money would be returned or adjusted. Some of the companies opposed the new approach and stayed away while others remained hesitant and could not meet the deadline for EoIs.

The PPIB had been informed that majority of the investors could not get enough time due to prolonged Eidul Fitr holidays followed by unrest created by protest marches of Imran Khan and Tahirul Qadri and also due to change of procedure.

The board was, therefore, requested to extend the deadline for submission of EoIs until September 29 to enable all the previous applicants and fresh firms to participate have reasonable time to prepare their proposals.

The minister said the government was taking all possible steps to bridge the gap between demand and supply of electricity and hence wanted to facilitate the investors to make up for loss of time due to problems created by agitations.

“While remaining within legal bounds, we should provide maximum facilitation to the projects so that maximum number of megawatts are materialised,” he said.

It was informed that due to prevailing situation, the expected response could not be achieved and many prominent investors had requested extension of date in submission of EoIs.

The board also reviewed hydropower projects and decided to extend the Letter of Support (LoS) of 870MW Sukki-Kinari hydropower project on River Kunhar, District Mansehra, Khyber Pakhtunkhwa. The project is part of the “early harvest projects” priority list of the China Pakistan Energy Corridor.

This extension will allow the project to take necessary measures to implement the project at the earliest. The Board also desired removal of all bottlenecks for early development of 132MW Rajdhani Hydropower Project in AJK in consultation with the Government of Azad Jammu and Kashmir.

Published in Dawn, August 28th, 2014