MUZAFFARABAD: The Azad Jammu and Kashmir (AJK) government on Friday decided to float fresh tenders for a Rs7 billion 48MW Jagran-II hydropower project after an earlier controversial award of the contract sparked debate.

The board of directors of AJK Power Development Organisation (PDO) approved the re-tendering of the project located at the run of Jagran Nullah in the northeastern Neelum valley.

Giving a unanimous approval, the board, headed by minister in-charge Chaudhry Mohammad Yasin, directed the PDO to carry out the re-tendering process on a fast-track basis so that 68 million euro soft loan, pledged by the Agence Française de Développement (AFD), could be secured.

“The process should finish within six months in a transparent manner so that the contract is awarded to some reputed international firm for execution and completion of the vital project in time,” Mr Yasin said.

The contract of Jagran-II project was given to China International Water and Electric Corporation (CWE) in June last year for being a ‘responsive lowest bidder’. The other contender for the project was Sinohydro, also a Chinese company. The decision was taken by the board through a majority vote. The board was then headed by the AJK prime minister and comprised 10 members, including the minister in-charge of PDO, and minister for finance/planning and development.

However, Mr Yasin wrote a “note of dissent” to Prime Minister Chaudhry Abdul Majeed shortly afterwards.

The award process was also challenged in the AJK High Court by Chaudhry Tariq Farooq, opposition PML-N lawmaker, due to which the PDO was unable to issue work order to the CWE.

On Sept 24, the World Bank Group announced debarment of the CWE and its controlled affiliates for a period of three years with conditional release.

The debarment followed an investigation by the WB’s Integrity Vice Presidency (INT) into allegations of sanctionable practices involving the company in a hydropower project in Africa and a road project in South East Asia, according to a statement still available on WB website.

In the wake of the WB announcement, the donor (AFD) also suggested to the PDO and the Economic Affairs Division to go for rebidding of Jagran-II project. However, no progress could be made towards that end in almost three months due to the non-convening of board’s meeting.

In the meanwhile, the AJK government restructured the board in the first week of December, through an ordinance, bringing the minister in-charge of PDO at the helm, instead of the prime minister.

Under the amended law, not only the prime minister, but also the minister for finance/planning and development and the chief secretary were ousted from the authoritative board.

Published in Dawn January 31st, 2015

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