Govt fines Chinese contractors for delay on 2 RLNG power plants

Islamabad: In the wake of failure to make $1.65 billion two RLNG power plants at Haveli-Bahadur Shah and Balluki available for commercial supply of electricity, the government has started penalizing the EPC contractors of both projects of 2460 MW and to this effect so far total amount of Rs12 billion has been accumulated in this account, The News has reliably learnt.

The finalized target for CoD (commercial operation date) of both the projects was January 9, 2018 but the failure of Chinese contractors in making both the projects fully operational has attracted the per day penalization of $12,00,000 of the EPC contractors ($600,000 per day for each contractor) since then. This means that the EPC cost of both the projects have decreased by 10 percent so far.

The top official privy to the development disclosed that Power Division and National Power Parks Management Company that look after the affairs of both the RLNG power plants on behalf of federal government has starting penalizing the Chinese contractors keeping in view the NAB’s drive against corrupt practices. The penalties will be deducted from the final payments to be paid to the contractors.

However, the officials fear that very influential personality of Punjab government may intervene and try to halt the penalization proceedings being taken against the contractors. Rashid Langhrial, Chief Executive Officer of National Power Parks Management Company (NPPMC), confirmed saying that NPPMC has invoked the penalty clause because of the failure of the two Chinese contractors.

To a question he said that following the decision of Prime Minister Shahid Khaqan Abbasi, NPPMC has sought the NoC from NICL for initiating the process for arranging the reinsurance cover from private company in the international market. He claimed that from the date of NoC, he will take 10-12 days in arranging the reinsurance cover that will be well within the Nepra’s ceiling kept for reinsurance for operational period of the projects for 30 years.

The top sources said that Power Construction Corporation of China is the contractor for Haveli-Bahadur Shah plant and China-based Harbin Electric International Company is for Balluki Plant and they were duty bound in making the projects fully available for commercial operations by January 9, 2018.

The top mandarins said that management of the two projects wants the more but justified delay in commissioning of the projects arguing that the said two projects are now the national assets of the country and they should be made functional once all kinds of tests and snags are removed. However, the political leadership wants the projects should come on stream as soon as possible particularly prior to the advent of the Ramazan which is not far away just with an aim to saving its skin from the wrath of the masses as the delay will fuel the hike in loadshedding in the holy month of Ramazan.

According to officials, about the Haveli-Bhadur Shah RLNG power plant, Langrial said that the plant’s testing on diesel has completed and right now its performance testing on gas is underway. Sometimes the project generates 600 MW, 800 MW and sometimes it produces the 1320 MW. “We do this because of the purpose of testing of the plants. And after three days, the project will be closed down and after a pause of two to three days; it will be run again on various capacities.”

Coming to Balluki RLNG power plant, he said that testing of the plant is underway for the last 5 to 7 days and after the pause of some days it will be run for 12-13 days for special testing so that wires in the plants and all ends could be thoroughly checked. As far as the Bhikki RLNG power plant is concerned, Langhrial said this plant belongs to the Punjab government. However, he said that the reliability run test of the Bhikki plant has entered into the fourth day. The process of this kind of testing will take seven days.