ADB-funded energy projects facing delays

Updated 03 Sep 2020

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PAKISTAN has an extraordinary rate of electric transmission and distribution losses and is ranked 14th among 131 countries. — AFP/File
PAKISTAN has an extraordinary rate of electric transmission and distribution losses and is ranked 14th among 131 countries. — AFP/File

ISLAMABAD: Almost all of the Asian Development Bank (ADB)-funded energy projects worth $1.7 billion for improvement in the transmission and distribution sector are facing serious implementation problems.

This was reported at a tri-partite meeting presided over by Federal Minister for Economic Affairs Makhdum Khusro Bukhtiar and attended by ADB’s Country Director Ms. Xiaohong Yang, deputy chairman Planning Commission and officials of relevant ministries.

During the portfolio review meetings, participants expressed satisfaction over the progress on almost all of the non-energy ADB-funded projects worth $1.35bn particularly those in the highways and communication sector, the Federal Board of Revenue (FBR) and the National Disaster Relief Fund (NDRF).

On the first day of the portfolio review meeting, the government and ADB authorities reviewed federal projects and would move on to the provincial projects on Thursday. The two-day portfolio review session is being organised by the Economic Affairs Division.

The volume of ADB-funded projects in the country is around $6.6bn, according to an official announcement.

A Power Division official told Dawn that four out of five projects in the energy sector were ‘at risk’. The meeting was told that most of these projects were facing various bottlenecks like manpower issues, land acquisition problems and bidding and operational and management challenges and had been showing slow to no progress.

He warned these risks would lead to cost escalations, unnecessary delays and may result in loan cancellations unless corrective measures were introduced at the highest level. He said the projects would be taken up with Prime Minister Imran Khan shortly for quick implementation.

The problematic projects included $688 million 660MW Jamshoro Power Generation Project, $544m Power Transmission Enhancement Investment Programme (Tranche 2 & 3) and $400m Power Distribution Enhancement Investment Programme (Advance Metering Project) for Islamabad and Lahore electric supply companies. All these projects are crucial to reduce transmission and distribution losses and improve cost recovery of electricity sold and ultimately help contain ever increasing circular debt.

Meanwhile, a relatively smaller project worth $81m in power transmission enhancement was reportedly on track but that also required full attention of authorities for its success and completion.

The meeting was generally satisfied with $905m worth of projects being executed by the National Highway Authority and Communications Department and $250m modern border custom management facilities at Torkham, Chamman and Wagah. The project, being executed by the FBR was described as ‘on track’. Equally satisfactory opinions pertained to $197m worth of the NDRF projects.

The meeting also discussed projects related to climate change and national health services and research that were currently at an initial stage and would be taken up by the Economic Coordination Committee of the Cabinet in its coming meeting next week for approval.

An official statement said the meeting reviewed projects related to the Power Division, Ministry of Communications, Ministry of National Health Service and Research, Ministry of Climate Change, FBR & NDRMF.

Minister Bakhtyar appreciated the bank’s role in supporting the country’s development agenda and underscored the importance of efficient and effective planning and execution of projects.

He said the government would review the progress of on-going projects on a quarterly basis under the chairmanship of PM Imran Khan to expedite implementation. The minister also highlighted the role of review sessions for the surveillance and monitoring status of projects, identify the bottlenecks and set the targets to expedite implementation process. At conclusion of the meeting, economic affairs minister directed line departments to galvanise the ADB-funded projects.

Published in Dawn, September 3rd, 2020