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Sunday June 16, 2024

Transmission line from Dasu: Project in limbo over WB-MPs panel differences

By Israr Khan
April 06, 2023

ISLAMABAD: A parliamentary panel and the World Bank are in disagreement over the award of a consultancy for an engineering services contract related to the construction of a 250-km-long double circuit 765kV transmission line from Dasu Hydropower Plant to the Islamabad West substation.

The panel has accused the World Bank of favoritism towards a particular company, referred to as its ‘blue-eyed’ company, which has caused a rift between the two.

The Senate’s Standing Committee on Power met here with Senator Saifullah Abro in the chair on Wednesday.

The contentious project, which carries a hefty price tag of $700 million and is financed by the World Bank, remains in limbo as a parliamentary panel has recommended putting the agreement on hold pending more details on the hiring of consultant GOPA.

Despite this, the World Bank has insisted that the Senate Standing Committee lacks the authority to halt the process. The disagreement between the two entities highlights the complexities and tensions that can arise when large-scale projects involving significant sums of money are undertaken.

Senator Saifullah Abro claimed while the World Bank was financing the project, it should not have the ability to dictate the terms and award the contract to its preferred consultant. This claim has added fuel to the already tense situation between the parliamentary panel and the World Bank. However, Rana Abdul Jabbar Khan, the Managing Director of the National Transmission and Dispatch Company (NTDC), provided some clarity on the selection process. Khan stated that the project was advertised in December 2016 and that 20 firms submitted applications. From those submissions, six firms were shortlisted for the contract.

The details provided by Khan give some insight into the process and may help alleviate concerns of favoritism.

Senator Saifullah Abro expressed his concerns on awarding of the contract to GOPA and remarked that the evidence submitted by NTDC clearly shows that irregularities had been committed. He directed the NTDC to submit all necessary documents in the next meeting, indicating that the parliamentary panel was determined to get to the bottom of the issue and ensure that due process had been followed.

This development underscores the seriousness with which the panel is approaching the matter and suggests that there may be further scrutiny of the contract award process in the coming days.

The parliamentary committee has also examined the bidding process of K-Electric, with officials from the Privatisation Commission providing information on the process. The officials stated that the process began in 2002 and that four private entities submitted Expressions of Interest (EOI), but only two qualified for the bidding process.

These were Kanooz Al Watan and Hasan Associates, with bids of Rs1.65 per share (Rs15.86 billion) and Rs1.01 per share (Rs9.71 billion), respectively. However, Kanooz Al Watan did not make the balance payment and K-Electric was ultimately awarded to Hasan Associates at a price of Rs1.65 per share, amounting to Rs15.86 Billion.

The officials further informed the committee that a Financial Adviser appointed by the Asian Development Bank evaluated the value of K-Electric and oversaw its privatisation process. Senator Saifullah Abro raised questions about the factors considered by the Financial Adviser when evaluating the price of K-Electric and directed the Privatisation Commission to provide details of the appointment of Financial Adviser. These developments suggest that the parliamentary committee is taking a thorough approach to the matter and is determined to uncover any irregularities that may have occurred.

The parliamentary committee also took a strong stance on the recent increase in electricity costs. According to officials from the Power Division, as of March 2023, the per unit price stands at 30.55 rupees, with capacity payments to various Independent Power Producers (IPPs) being a major contributing factor to the increase.

Senator Saifullah Abro expressed his concerns over the rising electricity costs and suggested that the government should freeze capacity payments to IPPs, given the current inflation in the country. He also directed the Power Division to provide details of capacity payments made so far to IPPs in the next meeting, indicating that the committee was keen to hold relevant authorities accountable and ensure transparency in the process. This development highlights the growing concerns over the cost of electricity in the country and the need for the government to take appropriate measures to address the issue.

Senator Fida Muhammad, Senator Zesshan Khanzada, Senator Sana Jamali, Senator Haji Hidayatullah Khan, Additional Secretary Power Division Arshad Majeed, MD NTDC Rana Abdul Jabbar Khan and other senior officers of relevant departments were also in attendance.