ISLAMABAD: Beijing has clearly informed Islamabad to set aside the Public Procurement Regulatory Authority (PPRA) rules and sign an agreement with the Chinese companies for initiating the mega project in water and power sector by declaring energy emergency in Pakistan for at least four to five years, a senior official at the Private Power Infrastructure Board (PPIB) said.
The high-powered delegation, which is due in Pakistan on May 6 for Pakistan-China Joint Energy Working Group (JEWG) to be held on May 7-9, is to clearly ask Pakistan to sign an agreement with China’s government to help cope with the energy and water crises and hand over the projects to Chinese companies without holding the international competitive bids (ICBs), the official, quoting the indications from Beijing, said.
In case China agrees with the proposal of setting up $10 billion energy infrastructure development fund it will again link with the contracts of the projects without participating in ICB, he said.
This will be the follow up meeting of Pakistan-China JEWG that was held in Beijing on August 1-2, 2011 and in that meeting China had linked its investment in water and power sector with suspension of PPRA rules, saying that it would provide 100 percent funding to the projects only after the projects are handed over to its companies, ensuring that there would be no international competitive bidding (ICB).
China had also sought protection against exchange rate variation with respect to Chinese Currency (RMB) from the Pakistani authorities. Beijing is of the view that since the dollar is fast depreciating against its currency, it would lend the loan to Pakistan and its repayment in its own currency.
The official said in case the government sets aside the PPRA rules and directly gives the projects of paramount importance to the Chinese government, then there will be a lot of hue and cry, particularly from the opposition parties in the current politically charged atmosphere. “On top of it, the Transparency International, Pakistan (TIP) will raise the issue.” “We are practically in the lurch and have no other option, but to move the parliament and seek waiver from the PPRA rules for handing over the projects to China as when we call ICB, no reasonable response from other developed countries, particularly from the European Union (EU) countries and the United States trickles down because of the well-known, but bitter fact that the country is faced with the law and order situation coupled with deadliest spate of terrorism.” Mentioning about the Neelum-Jhelum hydropower project, Nandipur and Cheechuki Malian projects, the official said that the projects got delayed by six-eight years just because of the fact that the projects were earlier denied to Chinese companies.
However, when other companies from developed countries did not takeover the projects, the authorities had to again move the Chinese companies. And the Chinese companies because of the wastage of time came up with upward revised rates for the construction of the projects. “We will have to calculate the impact of indecisiveness and inordinate delay in making the decision, which is 10 times more than the corruption some quarters fear if the projects are handed over to Chinese companies without holding the ICB.”
The official said that in the upcoming meeting, the government will tell the Chinese delegation headed by energy minister that it is not possible for Pakistan to suspend PPRA rules, but now we are working to ink some memoranda of understanding (MoUs) on some important projects with China after it rejected the agenda earlier decided by the Pakistani authorities. There is another main issue of currency, which may prove as a bottleneck in the way of investment by China in the power and water sector, as Beijing has told Pakistan that it will extent credit lines in its currency and ensure repayment also in its currency as the US dollar is losing its value against the yuan.
The Finance Division has also refused to provide China the protection against exchange rate variation with respect to Chinese Currency (RMB), the official said, adding that this means the upcoming dialogue may hit snags and could not advance as Pakistani authorities have failed to fulfill the demands of the Chinese government.
During the three-day dialogue, Pakistan will pitch the projects of national importance for Chinese help that include Sindh Engro mining and power project, Sonda-Jherruk coal project, AES imported coal project, Diamer-Bhasha hydropower project, Neelum-Jhelum hydropower project, Kohala hydropower project, Bunji hydropower project, Suki-Kinari hydropower project, Kotli hydropower project, Madian hydropower project, Nandipur combined cycle thermal power project, Chichoki Mallian combined cycle thermal power project, 500kV transmission line for evacuation of power from 747MW Guddu power project, 220kV transmission line to transmit power from 404MW Uch-II thermal power project, 500kV transmission line project for dispersal of power from Sindh Engro Thar coal power project, 500kV transmission line project for Neelum-Jhelum hydropower project, 500kV transmission line project for evacuation of power from Tarbela hydropower fourth extension project, mapping of renewable energy resources such as wind, solar, biomass, waste to energy, geothermal, small and micro hydro in new geographical areas of Pakistan, technology transfer for wind and other RE projects, support, technology transfer, standardisation, of off-grid and decentralised RE applications and geo-thermal mapping of Pakistan, and Geological Survey of Pakistan’s project “Geological mapping of Pakistan–China border at 1:50,000 scale.