Faults found in foreign-funded power projects

Published November 28, 2023
Senate Standing Committee on Power Chairman Saifullah Abro presides over the committee’s meeting at Parliament House,  Islamabad on Nov 27. — Senate website
Senate Standing Committee on Power Chairman Saifullah Abro presides over the committee’s meeting at Parliament House, Islamabad on Nov 27. — Senate website

ISLAMABAD: A Senate panel on Monday found fault with the procurement of foreign multilateral-funded projects in the power sector and ordered the National Engineering Services of Pakistan (Nespak) not to sign a final agreement with a local firm till a conclusion because of suspicious circumstances.

A meeting of the Senate Standing Committee on Power presided over by Saifullah Abro took up the matter of Nespak on non-implementation of its orders regarding the submission of a re-evaluation report and status for Asian Development Bank (ADB) funded project regarding ACSR Bunting Conductor.

A Nespak team told the panel that the domestic preference given in the financial evaluation was based on the EDB (Engineering Development Board) letter issued in February 2015. It conceded that the clarification should have been sorted out for the usage of the 2015 letter and the evaluation had been done for the year 2022, which was not an appropriate action. The committee was further informed that the said letter was valid for a period of six months.

The committee observed that Newage Cable was given domestic preferences on the basis of an outdated letter, which put the whole procurement process in doubt. The committee after deliberation at length unanimously resolved that the matter should be taken with the ADB and the Nespak in consultation with the National Transmission and Despatch Company (NTDC) should send a note to the ADB and inform them of the letter based on which the contractors were technically qualified.

It should be noted that the letter issued in 2015 was valid for only six months, and therefore held no ground as it became infructuous due to a lapse of five years.

The committee, however, deferred the matter with the directions that the Nespak and NTDC should share with it the draft note meant for the ADB within three days. It was also informed that though the ADB had issued a no-objection certificate to Newage Cables, the committee recommended that the agreement should not be signed until the reevaluation process is completed in light of the committee recommendations.

NTDC apology

In the matter of adverse remarks by NTDC and its board of directors against the Senate panel on non-implementation status and non-serious attitude on clear recommendations of the committee, the Power Division officers apologised for the inappropriate letter to the Senate Standing Committee on Power.

The officials further explained that the letter was written by the then NTDC chairman and the board did not approve the draft. The chairman later resigned from his position and the NTDC board members apologised for the previous letter and officially withdrew it.

The committee was told that members of the BoD highly valued the Senate panel’s input on the oversight of the ministries.

The committee also took up the Dasu Hydro Power Station to Islamabad transmission line contract funded by the World Bank. A Turkish company SA-RA Energy which was the second lowest bidder told the committee that the award of the contract to Chinese Sinohydro was not appropriate since it did not have any relevant experience and should have been disqualified.

“There are glitches and major mistakes in the submitted contract documents,” a representative of SA-RA Energy said. The panel was also informed that SA-RA had already held meetings with the NTDC and the Power Division and was ready to take the contract and complete it in time.

The committee was also informed that the matter was sub judice in the court. The committee deliberated at length the irregularities in the Transmission Line Contract of the Dasu Hydro Project and decided that NTDC should be allowed to give their point of view.

The SA-RA representatives said the company had also taken up the matter with the World Bank’s top management and established irregularities in the procurement.

The committee decided unanimously to hold an in-camera meeting soon with all the stakeholders on the issue because of the involvement of external factors.

Published in Dawn, November 28th, 2023

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