ISLAMABAD, June 7: A poor response from bidders has put in jeopardy the $1.6 billion Neelum-Jhelum Hydropower Project (NJHPP) in Azad Kashmir. A senior government official when contacted said the president and the prime minister would be taken into confidence over the latest situation and their guidance would be sought on whether to re-bid the project or adopt some other strategy.

The project is of strategic and national importance because it could protect Pakistan’s priority rights over the Neelum waters and provide cheap hydel electricity to the system.

In view of the poor bidding results and doubts about its future, the federal government has also withdrawn an allocation of Rs5.5 billion to the project under the public sector development programme (PSDP 2005-06) within a few days of its approval by the annual plan coordination committee (APCC) on May 17.

According to a latest status report submitted to the federal government on June 1 by Wapda, the executing agency of the NJHPP, 13 international firms - four local, five Chinese, three European and one US - had purchased tender documents but only three of the joint ventures submitted their tenders before the last date for the receipt of bids on May 31, 2005.

All the three joint ventures involved Chinese companies but two of them did not provide a bid guarantee. The third company is currently facing problems at the Mangla dam raising project and a probe by a parliamentary committee on water and power.

The first bidder - China Water and Electronic (CWE)— provided a bid guarantee and a letter of intent from the China Development Bank to consider financing the company if its bid was accepted.

The second bidder - a consortium of China Gezhouba Water and Power, China National Machinery and Equipment and Descon Engineering of Razaq Dawood — did not provide a bid guarantee, even though the same was demanded in the tender. It has indicated it would provide financial arrangements from Grattan Investment and Bank of China.