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Prime Minister Nawaz Sharif.—File Photo
Prime Minister Nawaz Sharif.—File Photo

LAHORE: Prime Minister Nawaz Sharif has ordered an inquiry into a large increase in the cost of Nandipur power project and directed the secretary of the Planning Division to submit a report within three days.

The prime minister directed that all dimensions of the matter should be considered and the report be submitted after a thorough scrutiny.

He took the action after reports that the cost of the project has been revised upward in the PC-I without any cogent reason.

The original cost of the project was set at $329 million in 2009 and it was scheduled to be completed in 2011. But the project was delayed because the then PPP government refused to give a sovereign guarantee for it and clear its equipment lying at the Karachi port for two years.

PPP leader Naveed Qamar claimed that the Chinese firm working on the project had sought just $40 million in cost escalation and coupled with the extended insurance period the total cost should have been around $400m.

But in the revised PC-I, the government quoted $574m as the cost “in the worst example of white-collar crime to rob the public”, he said and demanded an investigation into the matter.

The PML-N government has attributed the increase in cost to difference in rupee-dollar parity.

Information Minister Pervez Rashid claims that a part of the project’s machinery got damaged at the port and some components disappeared.

Punjab Chief Minister Shahbaz Sharif had met officials of Dong Feng, the contractor working on the Nandipur project, during his recent visit to China and persuaded them to resume work on the site.

Engineers of the Chinese company arrived on July 9, inspected the machinery at Karachi port and visited the Nandipur site.

The engineers will get the equipment and instruments of the project released and restart work at the earliest.

Comments (6) Closed

WK Jul 15, 2013 10:39am

"The PML-N government has attributed the increase in cost to difference in rupee-dollar parity."

The price quoted earlier and now both are in USD. It is understandable that if during this period Chinese yuan appropriated against the USD and Chinese are now demanding more as a result of which the cost increased. However, the PML-N govt is attributing this increase in cost to rupee-dollar parity.

I believe that the rupee-dollar parity only plays it's part in imported raw material prices which would have increased as a result of depreciating PRK. Assuming 60% as raw material cost which would be affected by the depreciating PRK, it means that during these 4 years, prices of the raw materials have increased by around 125% which seems impossible.

Maybe I'm missing out some important factor resulting to an increase in around 75% of the overall cost. Could someone please explain how rupee-dollar parity affects the price to this extent?

rashid zaidi Jul 15, 2013 11:49am

The people whom we refer to as our all weather friends, namely the Chinese must be getting really tired of us, delayed projects delayed financing, Chinese personal killed at work in Pakistan, what are we doing, this is a country trying to help us at various levels. We should be doing a better job in taking care of such matters.

Khan Jul 15, 2013 02:13pm

Great efforts.......Appreciated!!

Muhammad Akram Khan Jul 15, 2013 02:50pm

425MW combined cycle Nandipur thermal power project was an ill conceived project by Musharraf's government. The planners ignored the high cost of oil and the shortage of gas required to run this project. Even if this project is now completed at a cost of US$574 million, it will remain idle like many existing gas fired thermal plants or it will generate unaffordable electricity if it is run on oil.

MK Jul 15, 2013 03:47pm

Really he does not know what is going on that he is asking for report..... Wish that someone would have asked him about a report why Punjab has a severe power outage. So sad.

Shahid Saleem Jul 17, 2013 05:36pm

Unfortunately our media has no clue about the economics. The increased cost may be: 1). Interest for last 5 years on the loan taken for this project. On a compound basis it could alone be well over 100 million. 2). Cost accelaration of the project in 5 years 3).Damage to the equipment on the port & stealing of equipment. May have to re-inspect all the equipment 4). Port charges called demurage, for three years 5). Mobilising of equipment & personal 6). Few other