LAHORE: After wasting crucial 18 months on award of the contract for transmission line of Neelum-Jhelum Hydropower Project, the National Transmission and Dispatch Company (NTDC) is told to cancel it because of “numerous contractual violations,” which were noted by its board of directors and the Public Procurement Regulatory Authority (PPRA).

The newly-inducted BoD had referred the case to PPRA for decision – either granting exemption to the alleged violations or giving advice on the contract’s fate.

In its reply (F.No 1/68/2013/legal/PPRA), the PPRA refused exemption and endorsed the BoD’s decision to go for re-tendering.

The BoD has now issued orders accordingly.

According to a former head of the NTDC, instead of simple cancellation of the contract, the board and the government should also fix the responsibility for the violations and waste of 18 important months.

“The Neelum-Jhelum would start generating electricity by 2016 – only two years away. The transmission line, which should have been half way through by now, is now up for re-tendering.

If it is not built by that date, power cannot be transmitted to national grid, resulting in loss of millions of rupees a day.

In such a situation, the NTDC has wasted one-and-a-half crucial years. Someone has to be held responsible for this national loss,” he demanded and added: “Now re-tendering would waste time.

Meanwhile, many other transmission lines are being built and massive manpower and a large number of sub-contractors have been engaged. It might cause extra delay, which is criminal given the national energy crisis.”

A Senate standing committee had also taken up the matter of violations and asked the NTDC to go for re-tendering.

According to the details of the case, given the completion timeline of NJHP, the NTDC was told to prepare the power transmission line.

With the induction of the Pakistan Muslim League-Nawaz government, a new urgency was added to the project and power transmission line. The new government approved the PC-I (for around Rs13 billion) on August 27, 2013.

The NTDC, which had floated tenders in August 2012 that stood almost time-barred by then, took up the old bid, changed its structural provisions, sought fresh documents and accommodated a single bidder (a Chinese contractor) at a phenomenally higher cost of Rs25 billion against PC-I of Rs13 billion and competitive bidder’s offer of Rs13 billion.

An engineering consultant was also appointed after the bid to prepare fresh cost estimates and justify the contract price.

The consultant, on his part, submitted two estimates within two month – with a difference of Rs5 billion. According to the first estimate, he came up with a cost of Rs20 billion against PC-I cost of Rs13 billion, which was later revised upwards to Rs25 billion.

The NTDC accepted these new rates and awarded the contract on their basis to a Chinese contractor. The NTDC managing director issued the letter of intent to

the Chinese contractor, subject to BoD approval which was being finalised.

The newly-inducted BoD, noting the violations, referred the case to PPRA, seeking its opinion whether they constituted violations of its rules or not, and if they did, whether exemption could be granted to them? With PPRA refusing to grant exemptions, the BoD has instructed the NTDC to go for re-tendering.