LoI for 590MW power project signed with Chinese firm
27
ISLAMABAD: The government on Tuesday issued Letter of Interest (LoI) for 590MW Mahl Hydropower Project in Azad Jammu and Kashmir (AJ&K) to a consortium, led by CWE Investment Corporation of China, a company owned by China Three Gorges Dam, but blacklisted by the World Bank.
A spokesman for the Private Power and Infrastructure Board (PPIB) said since the project was not offered under public procurement and involved private investment in a power project financed by the private sector, the PPIB or the government of Pakistan did not have any risk involved in it.
Secondly, the project did not involve any World Bank financing that could have a bearing on the government.
He said the entire responsibility about financing and execution of the project related to the private sector which is bound by the performance guarantee to deliver on various milestones. On failure, the government had the right to confiscate the performance guarantee.
Informed sources said that the board of directors of the PPIB was also informed about CWE’s blacklisting by the World Bank on corruption charges, but the board was satisfied with the explanation given by the PPIB’s law department over no legal difficulty in the deal.
The World Bank had blacklisted the company in September this year from any WB-funded project under its fraud and corruption policy for three years ie Sept 24, 2014 to 2017.
The LoI was signed by Sheng Zhendong on behalf of CWE Consortium and Acting Managing Director of PPIB Shah Jahan Mirza for the government.
M/s Trans Tech Pakistan is the other consortium partner. Minister for Water and Power Khwaja Mohammad Asif and other members of the PPIB board also attended the signing ceremony.
The Mahl project is a run-of-river Hydropower Project being set up at the dual boundary of Punjab and AJ&K, with an estimated cost of $1.2 billion.
The PPIB board also approved re-advertisement of 350MW Athmuqam Hydropower Project in AJ&K which had attracted only one investor a couple of months ago.
The minister said that the primary focus of the government was on local resources for power generation and emphasis was on coal in the southern region and hydro projects in the northern region of the country.
The board also called upon the agencies concerned to expedite two projects at Thar coal, ie 1200MW by China Power International Holding and 660MW by Engro Powergen Ltd and LoIs for both the projects would be issued soon.
The minister also dispelled the allegations by Imran Khan that the hydro projects in Khyber Pakhtunkhwa were not being considered by the federal government. He said that during the visit of prime minister to China, Suki Kinari hydro project of 870MW was also signed, to be developed in District Mansehra.
Published in Dawn, November 12th, 2014
