ISLAMABAD: The PML-N’s major power plant — Gadani Power Park — aimed at generating 6,600 megawatts is not moving forward because of poor investor response.

The government has now extended for the second time the bidding process for 10 coal-based power projects of 660MW each at Gadani in Balochistan.

Sources said the government had also taken back the additional assignment of chief executive officer (CEO) of Gadani Power Park Management Company (GPPMC) from Water and Power Secretary Nargis Sethi and appointed Dr Zafar Nasrullah Khan, a joint secretary in the ministry in her place.

The GPPMC was created as a special purpose vehicle for the management of 6,600MW projects at Gadani and to provide infrastructure facilities at the project site to facilitate international investors, mostly from China.

“There is no infrastructure development at or leading to the project site so far,” said an official, adding that Prime Minister Nawaz Sharif had launched the project soon after coming to power. Some Chinese firms had found the Gadani as unviable and proposed setting up coal-based projects near the Karachi Nuclear Power Plant.

At the time of GPPMC creation, a case was moved for inducting its top management at private sector emoluments – like about Rs1.6 million per month for its CEO but the move hit snags.

A source indicated that Ms Sethi might have proceeded on LPR (leave prior to retirement) following the controversy surrounding overcharging electricity consumers last month. An official close to her said she was on a 20-day leave and expected to join office next week. Ms Sethi herself had declined to lead the project and sent a summary suggesting the name of Dr Khan as her replacement. Her retirement is due in December.

The sources told Dawn that the last date for receiving expressions of interest (EoIs) for the projects had now been set as Oct 31 by the Private Power and Infrastructure Board (PPIB) without approval by its board of directors.

The $10 billion projects were first advertised in July this year seeking expressions of interest by Aug 18. Blaming poor response from investors on political tension in the federal capital because of Imran Khan and Tahirul Qadri’s sit-ins, the government had extended the deadline to Sept 29 but the investor response failed to pick up.

The sources said the last time when the PPIB wanted to extend the deadline it took up the matter with Nargis Sethi who decided to seek approval from the board of directors. She did not agree to request the minister for water and power to approve the deadline extension. The PPIB board headed by the minister subsequently took the decision.

This time, however, the acting managing director of PPIB Shahjehan Mirza decided on his own to extend the deadline for another month even though the PPIB’s legal department had raised legal points. The department is of the opinion that the extension should come from the PPIB board or a forum higher than it given its previous sanction by the board.

Mr Mirza, however, said that it was within his powers as acting managing director of PPIB to extend the deadline. The sources said the PPIB had received only three EoIs for 10 projects by the first deadline of Aug 18 and the number did not increase.

The sources said the government itself was responsible for the poor investor response. It had earlier registered foreign companies for setting up the projects through negotiated memoranda of understanding. 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 laws.

Published in Dawn, October 17th, 2014

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