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Cost of Nandipur Power Project skyrockets to Rs84 billion

Updated September 15, 2014

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Prime Minister Nawaz Sharif takes a look around the Nandipur Power project’s combined cycle plant after its inauguration ceremony.—APP file photo
Prime Minister Nawaz Sharif takes a look around the Nandipur Power project’s combined cycle plant after its inauguration ceremony.—APP file photo

ISLAMABAD: Amid heavy criticism, the cost of the Rs27 billion Nandipur Power Project is now a staggering Rs84bn, making it the most expensive power project in Pakistan.

A copy of official documents, available with DawnNews, show that the cost of Nandipur Power Project has gone up from Rs57bn to reach Rs84bn. According to the PC-I of the project, the original cost was set at Rs22bn. However, due to a delay of seven years in the completion of the project, the cost went up. The PML-N government then revised the cost during 2013, jacking it up by Rs35bn and fixing it at Rs57.4bn.

When contacted by DawnNews, Managing Director Nandipur Power Project Muhammad Mehmood, expressed surprise about the increase in cost.

He further said that he was unable to respond at the moment as to how National Electric Power Regulatory Authority (Nepra) had determined the project cost at Rs84bn.

According to the MD, cost of the project currently stands at Rs57billion.

It merits mentioning here that official documents detailing the project cost was forwarded to Nepra after the necessary alleged approval of the MD.

However, Mehmood said he was unaware about the actual cost, which was mentioned on page 13 of the official document.

 Image of project cost in document
Image of project cost in document

The document states that Engineering, Procurement and Construction (EPC) cost and related cost was $502.318m, Taxes & Duties $21.773m, Emergency Spare parts $ 15.00m, O&M Mobilisation $5.00m, Non-EPC Construction $56.750m, Financial Fees & Charges $16.838, Interest during Construction (IDC) $229.491million. In this way, the total cost stands at $847.016million.

Recently, the Northern Power Generation Company (NPGC) had sought approval from Nepra to fix the power tariff of the project for 30 years at Rs18.16 per unit with furnace oil, Rs27.91/unit with high speed diesel (HSD) and Rs8.44/unit with gas.

Sources in the water and power ministry said Nepra, the power sector regulator, was perturbed over the increase in project cost and its tariff rate.

Sources said few members and officials of the authority were upset by the said raises in tariff and cost of the power project and were not in favour to pass on the additional burden to the power consumers.

On finding a plea from NPGC, Nepra in a bid to approve tariff in the light of stakeholder’s opinion/comments has advertised 13 questions and sent them to all stake holders including ministries of power, finance, planning, Sui Southern Gas Company Limited, Sui Northern Gas Pipelines Limited, Consumers Protection Associations etc.